LONDON (Thomson Financial) - The Canadian dollar slipped sharply following the Bank of Canada's decision to cut interest rates.
The BoC cut interest rates a quarter point to 4.25 pct, saying global financial market difficulties meant its worries on inflation have subsided.
It added that there is 'an increased risk to the prospects for demand for Canadian exports as the outlook for the US economy, and in particular the US housing sector, has weakened'.
The news sent the Canadian dollar sharply lower as the market was split down the middle ahead of the decision, with just 50 pct forecasting a cut.
At 2.16 pm GMT the US dollar was trading at 1.10143 cad, after having been at 1.0055 cad shortly before the decision.
rachel.armstrong@thomson.com
Source : http://www.forbes.com/afxnewslimited/feeds/afx/2007/12/04/afx4402415.html
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