BUSINESS REPORT: U.S. Federal Reserve will raise rates this year, hurting the Canadian dollar
The U.S. Federal Reserve has raised American interest rates five times since late 2015, after holding the holding Fed funds rate near zero for seven years.
And after the Fed minutes were released Wednesday, indications are that U.S. rates will continue to go higher in 2018, starting at the Fed’s next gathering on March 20-21.
The initial reaction to the minutes’ release saw the Dow go up as much as three hundred points, but as investors digested the news, the market tanked and finished in negative territory on the close.
However, after sleeping on the release, the U.S. markets are again higher Thursday morning.
American rate hikes usually push up the value of the U.S. dollar and put downward pressure on the Canadian dollar. The loonie has fallen from 81 U.S. cents on Feb. 1 to a low of 78.5 U.S. cents earlier Thursday.
© 2018 Global News, a division of Corus Entertainment Inc.