TORONTO: The Canadian dollar weakened against its US counterpart on Thursday, adding to losses from the previous session, when the Bank of Canada held interest rates steady and tempered expectations for a hike early next year.
The central bank struck a more dovish tone than investors had expected after last week's strong employment data.
"If the loonie had a stocking hanging on the chimney, it would probably find coal in it," said Brad Schruder, director of corporate sales and structuring at BMO Capital Markets.
"Between now and the end of the year, you are probably going to see the Canadian dollar lose anywhere from another 2 cents to 2-1/2 cents in value against the US dollar," he added.
Chances of an interest rate hike in January have dropped to less than 30 percent from 41 percent before Thursday's decision to hold steady, the overnight index swaps market indicated
The Bank of Canada raised rates in July for the first time in seven years, and then again in September. Its benchmark interest rate is 1 percent.
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