Canadian dollar plunges to post-recession low after central bank cuts key rate
TORONTO - The Canadian dollar fell to its lowest level in more than six years on Wednesday after the Bank of Canada cut its key interest rate and lowered its forecast for the economy. The loonie ended the day at 77.40 cents US, down 1.09 cents from the previous day's close, a level not seen since March 2009 when Canada was in the midst of a deep recession. Stephen Carline, managing director and head of equities at CIBC Asset Manage- ment, said the move wasn't entirely unexpected, although some market watchers had expected rates to remain flat. The dollar's slide, he said, mirrored the one following January's rate cut. The Bank of Canada cut its key interest rate by a quarter of a percentage point to 0.5 per cent on Wednesday, slashed its outlook for the economy and predicted a contraction in the second quarter due to lower oil prices and slumping exports. In a speech in Washington, Federal Reserve chairwoman Janet Yellen said that the American central bank is likely to raise its own benchmark interest rates this year if the U.S. economy continues to improve.