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The Canadian dollar has fallen to a seven-week low against the U.S. dollar after the Bank of Canada indicated it will not move to hike interest rates in the next two years.The Canadian dollar has fallen for the third straight day against the U.S. dollar, after the Bank of Canada moved Wednesday to lower expectations of an interest rate hike.
The loonie fell one-quarter of a cent to 95.70 cents US in early afternoon trading, a seven-week low, and is down a cent and a half so far this week.
On Wednesday, Bank of Canada governor Stephen Poloz indicated the bank is not expecting to raise rates any time soon, and that a cut to interest rates may be just as likely if economic conditions do not improve.
The bank also lowered its outlook for Canadian growth for the next three years, as Canadian exports have yet to pick up.
Andrew Pyle, senior wealth adviser and portfolio manager at Scotia McLeod, said he believes the loonie could hit 90 cents US by the end of the year.
Pyle noted Poloz's background as the head of Export Development Canada as another sign the bank wants to do what it can to lower the dollar and boost exports.
"I would bet right now that the Bank of Canada would like a little bit of juice from the currency, whether it's a two- to five-cent decline back towards 90 cents to get the export sector going and to get the economy going," Pyle said in an interview on CBC's Lang & O'Leary Exchange.
Other economists also see the dollar falling, but not as quickly. In a note, Capital Economics says it sees the Canadian dollar falling to 92 cents by the end of June next year.
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