TORONTO -- The Canadian dollar lost nearly a third of a cent Wednesday after the Bank of Canada, in announcing it was holding its interest rate steady, expressed concerns over economic growth.
The loonie fell 0.32 of a cent to 77.52 cents US, a day after the currency had rallied nearly a penny against a weak U.S. dollar and higher oil prices.
The central bank said it was keeping its key interest rate target at 0.5 per cent amid concerns about Canada's export sector and risks of lower inflation. Since July 2015, the bank's target for the overnight rate has been set at 0.5 per cent.
"Previous announcements were almost naively bullish, saying things are much better than we think," said John Stephenson, president and CEO at Stephenson and Co. Capital Management.
"This one was a little more jaundiced, more dovish and a little more negative on the Canadian economy in the short run, so that was a surprise."
North American stock markets ended the session barely changed with little major economic or corporate news to move stocks.
In Toronto, the S&P/TSX composite index fell 16.27 points at 14,796.75, with most sectors ending in the red and consumer staples and telecom leading declines.
On Wall Street, the Dow Jones industrial average lost 11.98 points at 18,526.14, while the broader S&P 500 composite index shed 0.32 of a point to 2,186.16.
The Nasdaq composite set a record close as it jumped 8.02 points to 5,283.93 after tech giant Apple Inc. (Nasdaq:AAPL) unveiled details for the iPhone 7. The U.S. company announced that its new smartphone models will be water- and dust-resistant. Shares in the company closed up 68 cents, or 0.63 per cent, to US$108.38.
Overall, investors seem to be waiting as they try to determine whether the U.S. Federal Reserve plans to raise rates at a meeting later this month.
One sign that it likely won't has been attributed to a lower-than-expected U.S. jobs report last Friday. The Labor Department said employers added 151,000 jobs in August, below the 182,500 jobs economists were expecting.
Stephenson said the Fed would've had more of a case to hike rates if there had been an addition of at least 200,000 jobs.
"The markets' view is let's wait and see, and see what the Fed actually does instead of what it talks about doing because they don't believe it anymore," he said.
Even encouraging new data wasn't able to move stock markets on Wednesday. The U.S. Labor Department said job openings jumped four per cent in July, suggesting that hiring will pick up in the coming months.
Commodities were mixed as the October crude contract added 67 cents at US$45.50 per barrel and October natural gas was down four cents at US$2.68.
The December gold contract fell $4.80 to US$1,349.20 an ounce while December copper contracts were up a penny to US$2.10 a pound.
