The Bank of Canada deciding to stand pat on interest rates took the loonie on a downward spin.
The Canadian dollar lost nearly half a cent after the central bank announced today that it is maintaining its key interest rate at 1.75 percent.
In a release, the BoC said its decision to press pause on rates was based on recent data that suggests a slowdown in the global economy, which was more “pronounced and widespread” than the bank had forecast in its January Monetary Policy Report.
The central bank added that trade tensions and uncertainty are weighing heavily on confidence and economic activity.
Domestically, Canada’s GDP slowed in the fourth quarter, dragged by consumer spending and a soft housing market.
On Bay Street, the TSX hovered above and below flat line for most of the day, before edging up five points at the final bell.
The index was held back by drops in the energy and health care sector.
Ten of 11 of the exchange’s most heavily traded companies traded lower today.
Meanwhile, a StatsCan report says the nation’s merchandise trade deficit grew to a record $4.6 billion in December. Canada’s exports declined 3.8 percent in the final month of 2018, almost entirely on lower exports of energy products, which were down as a result of falling crude oil prices.
Speaking of oil, crude was off by 33 cents to $56.23 US a barrel after reports showing a build of U.S. domestic inventories raised questions about demand.
In New York, trade uncertainty dampened sentiment, with the Dow falling by 133 points and the Nasdaq losing 70 points.
Investors are looking for clues about how trade negotiations are going between Washington and Beijing.
Elsewhere, America’s trade deficit skyrocketed to $891.2 billion, the highest in the nation’s history.
Gold bounced back from a seven-day losing streak, gaining $2.90 to $1,287 an ounce while the loonie went for a tumble, down 48/100ths of a cent to $0.7443 US.