- Category: Economic
- Published Friday, January 29, 2016
- CTV News
TORONTO -- Canada's dollar fell sharply after a surprise announcement by Japan's central bank overnight but bounced up later after fresh economic data was released early this morning in Ottawa and Washington.
The loonie's value fell sharply just after 5 a.m. ET but regained most of its decline about four hours later, after Statistics Canada and the U.S. Commerce Department released reports on gross domestic product.
The Canadian dollar traded at 71.41 cents US at 9:30 a.m., up 0.23 from Thursday's close at 71.18 cents US.
The loonie had traded as high as 71.58 cents US overnight before the Bank of Japan unexpectedly cut a key interest rate to negative 0.1 per cent. The dollar later dropped below 70 cents US briefly before rebounding.
Equity markets rose in Asia, Europe and North America after the Bank of Japan's move.
The Toronto Stock Exchange's S&P/TSX Composite index gained 33.36 points to 12,626.29 as North American markets opened at 9:30 a.m. ET. In New York, the Dow Jones Industrial average rose 77.05 points to 16,146.69, the broader S&P 500 index advanced 6.06 points to 1,899.420 and the Nasdaq 100 rose 0.75 points to 4,186.80.
The price of a benchmark barrel was above US$34 a barrel. The March futures contract was at US$34.26, up $1.04.
Both the loonie's low value and Japan's low inflation rate are symptoms of the decline in global oil prices, caused by an oversupply, low economic growth and the relatively strong value of the U.S. dollar against other currencies.
The April contract for gold, the new benchmark as January closes, was US$1,114.60, down $1.50.