NEW YORK CITY: The Canadian dollar hit a 10-year low against the US greenback on Wednesday (Thursday in Manila) on weaker growth prospects and the Bank of Canada’s interest rate cut last week.
Meanwhile, the British pound picked up strength on the bullish notes in minutes from the Bank of England’s last policy meeting.
The US dollar pushed up to as high as CAN$1.3047, a level last seen in 2004, before slipping back a bit. The Canadian economy has weakened with the plunge in oil prices, which fell again on Wednesday.
The central bank’s surprise rate reduction to 0.50 percent last week, the second cut this year, only added to the downward pressure. That was in sharp contrast with the United States, where the Federal Reserve is moving in the direction of raising rates.
The US dollar was also slightly higher against the euro and yen Wednesday.
The pound pushed back above the $1.56 level helped by the record on the last meeting of the BoE’s monetary policy committee (MPC).
“The July MPC minutes broadly reinforce the view that the Bank of England is now getting nearer to an interest rate hike,” said Howard Archer of IHS.
“While all nine MPC members voted for unchanged interest rates in July, this was significantly influenced by the crisis in Greece which was peaking at the time of the meeting.”
Archer said the BoE could move before the end of the year.