The Canadian dollar tumbled against its US counterpart on Tuesday, after the Bank of Canada surprised the markets by slashing interest rates to a 50-year low. The loonie fell 1.7% against the US dollar to C$1.2730 after the central bank cut rates by a higher than expected 75bp and said Canada was officially entering recession. Canada’s currency later pared losses to trade 0.8% lower at C$1.2616. The country’s trade-weighted exchange rate index had already fallen 15% since the start of October. The pound, meanwhile, slumped against the dollar, the euro and yen amid a fresh onslaught of grim economic data that further exposed the depth and severity of the UK recession. Overall, investors favoured the relative havens of the US dollar and the Japanese yen.

This entry was posted by Gwen Robinson on Wednesday, December 10th, 2008 at 5:45 and is filed under Capital markets. Tagged with loonie. Edit this entry.