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Loonie jumps as Bank of Canada sends more signals that interest rates may rise

A loonie is pictured in this illustration picture taken in Toronto January 23, 2015. Reuters/Mark Blinch

TORONTO – The loonie shot up following fresh signals from the Bank of Canada that it is giving more thought to raising interest rates, while Toronto’s main stock index continued its second day of declines.

The Canadian dollar was up one U.S. cent to an average trading price of 75.54 cents US, following comments by Bank of Canada governor Stephen Poloz today and senior deputy governor Carolyn Wilkins the day before that the economy is gathering momentum.

READ MORE: Experts believe interest rate hike may be coming after ‘hawkish’ Bank of Canada speech

The loonie is at its highest level since late February, when it fell below 76 cents US.

In Toronto, the S&P/TSX composite index edged down 4.05 points to 15,379.75, with base metals leading decliners.

South of the border, U.S. stocks changed course as investors put an end to a two-day drop for technology companies.

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READ MORE: Rising interest rates could cost the average Canadian $130 a month more in debt repayments

The Dow Jones industrial average gained 92.80 points at 21,328.47 and the S&P 500 index rose 10.96 points to 2,440.35, both record highs. The Nasdaq composite index climbed 44.90 points to 6,220.37.

In commodities, the July crude contract was up 38 cents at US$46.46 per barrel and the July natural gas contract declined six cents at US$2.97 per mmBTU.

The August gold contract gave back 30 cents to US$1268.60 an ounce and the July copper contract dropped two cents at US$2.60 a pound.