July 12, 2017 by admin

Loonie rallies following Bank of Canada interest rate hike

TORONTO — The Canadian dollar is soaring following the Bank of Canada’s decision to hike its key lending rate.
The loonie was at 78.66 cents US about three hours after the central bank’s announcement, up more than 1.25 cents from Tuesday’s average price of 77.40 cents US.
It’s been nearly a year — August 2016 — since the currency closed above 78 cents US.
The dollar has strengthened in recent weeks, buoyed by positive economic data, and the Bank of Canada’s decision to hike its benchmark interest rate for the first time in nearly seven years further fuelled it.
The bank had slashed its interest rates in 2015 to help the Canadian economy deal with a plunge in oil prices that began in late 2014.
It raised the rate by a quarter of a percentage point on Wednesday to 0.75 per cent, still low by historical standards.
The Toronto Stock Exchange’s S&P/TSX composite index was up a moderate 36.96 points at 15,186.10 in midday trading after climbing more than 100 points shortly after the central bank decision at 10 a.m. ET. The index was led by gains in Canada’s energy and consumer staples sectors.
In New York, the Dow Jones industrial average was up 122.04 points at 21,531.11, the S&P 500 index was ahead 17.84 points at 2,443.37 and the Nasdaq composite index climbed 60.84 points to 6,254.14.
In commodities, the August crude contract was up 72 cents to US$45.76 and August gold was up $5.80 at US$1,219.40 an ounce shortly after 12 p.m. ET. The September copper contract was up one cent at US$2.68 a pound. August natural gas was down seven cents to US$2.98 per mmBTU.