Canadian dollar falls

TORONTO — The Canadian dollar fell to a seven-week low against its broadly stronger U.S. counterpart on Thursday, after a hawkish shift in guidance by the U.S. Federal Reserve startled investors.

The loonie was trading 0.4 per cent lower at 1.2326 to the greenback, or 81.13 U.S. cents, adding to declines on Tuesday and Wednesday. It touched its weakest level since May 4 at 1.2346.

Shares fell globally and the U.S. dollar rose to its highest in more than two months against a basket of major currencies, after the U.S. Federal Reserve signaled it would raise interest rates and end emergency bond-buying sooner than expected.

Canada is a major producer of commodities, including copper and oil, which have benefited from Federal Reserve stimulus.

Copper prices fell to their lowest in two months, while oil steadied below a multi-year high it notched on Wednesday. U.S. crude prices were up 0.1 per cent at US$72.23 a barrel.

The Bank of Canada is starting to see signs that the country’s red hot housing market is cooling down, although a return to a normality will take time, Governor Tiff Macklem said on Wednesday.

Canadian home prices accelerated again in May from the previous month, posting the largest monthly rise in the history of the Teranet-national Bank Composite House Price Index, data showed on Thursday.