MW: Canadian dollar drops on weak Bank of Canada view
By Deborah Levine
NEW YORK (MarketWatch) -- The Bank of Canada said Tuesday it would keep its benchmark interest rate steady at 1%, while noting it expects weak growth in the U.S. and a brief recession in Europe to weigh on the Canadian economy. "The Bank expects that growth in Canada will be slow through mid-2012 before picking up as the global economic environment improves, uncertainty dissipates and confidence increases," Bank of Canada officials wrote in a statement. The bank projects that Canada's economy will expand by 2.1% this year, 1.9% in 2012, and 2.9% in 2013. Analysts expected policy makers to keep rates steady and acknowledge an improving economic outlook in the U.S. and Canada. One U.S. dollar USDCAD +0.22% turned up to buy 1.0448 Canadian dollars, from 1.0014 Canadian before the release and compared to 1.0029 in late North American trading on Monday. The greenback slipped as low as 99.89 Canadian cents before the announcement, its first foray under parity in about a month.
