Loonie soars more than a cent as Bank of Canada hikes interest rate
Interest rates slashed in 2015 to help the economy deal with a plunge in oil prices.
The loonie is soaring following the Bank of Canada’s decision to hike its key lending rate.
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 July 11th’s average price of 77.40 cents.
It’s been nearly a year – August 2016 – since the currency closed above 78 cent.
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 July 12 to 0.75%, 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.News from © Canadian Press Enterprises Inc. 2016