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Loonie lowest in more than six years after Bank of Canada cuts key interest rate

The Canadian dollar plunged below 78 cents US after the Bank of Canada cut a key interest rate by one-quarter point.
The Canadian dollar plunged below 78 cents US after the Bank of Canada cut a key interest rate by one-quarter point. The Canadian Press

TORONTO – The Canadian dollar closed at a post-recession low today after the Bank of Canada cut its key interest rate and lowered its forecast for the economy.

The loonie ended the day at 77.40 cents US, down 1.09 cents from the previous close, a level not seen since March 2009 when Canada was in the midst of a deep recession.

Despite the fall in the Canadian dollar, the S&P/TSX composite index ended the day up 62.88 points at 14,662.88.

READ MORE: Interest rate cut risks sending Canada’s housing market ‘off the charts’

The Dow Jones industrial average was down 3.41 points at 18,050.17, the Nasdaq index fell 5.95 points to 5,098.94, and the S&P 500 dropped 1.55 points to 2,107.40.

On the commodity markets, the August gold contract fell $6.10 to US$1,147.40 an ounce while the August crude contract was down $1.63 to US$51.41 a barrel.

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The August contract for natural gas rose 7.8 cents to US$2.92.