Canadian dollar tumbles ahead of expected rate cut

Tue Oct 21, 2008 8:27am EDT
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 * Bank of Canada rate announcement due at 9:00 a.m.
 * Lower oil prices weighing on Canadian currency
 * Canadian dollar at lowest level since Oct. 10
 TORONTO, Oct 21 (Reuters) - The Canadian dollar fell more
than 1 percent against the U.S. dollar to its lowest in over a
week on Tuesday as oil prices eased and traders braced for a
widely expected Bank of Canada interest rate cut.
 At 8:15 a.m. (1215 GMT), the Canadian unit was at C$1.2082
to the U.S. dollar, or 82.77 U.S. cents, down from C$1.1937 or
83.77 U.S. cents at Monday's close.
 That marked the Canadian currency's lowest level since Oct.
10, when it suffered its biggest one-day drop en route to
touching its lowest since 2005 on fears of global recession and
slumping commodity prices.
 That day, the currency fell as low as C$1.2135 to the U.S.
dollar, or 82.41 U.S. cents.
 The domestic currency's latest slide comes ahead of the
Bank of Canada's scheduled rate announcement at 9:00 a.m. (1300
GMT), when it is widely expected to lower its key rate.
 Most of Canada's primary securities dealers expect either a
25-basis-point cut or a 50-basis-point cut.
 The rate now stands at 2.50 percent after an unexpected
50-basis-point cut on Oct. 8 in a coordinated move with other
central banks to help calm ailing financial markets.
 Lower oil prices were also weighing on the Canadian dollar
since Canada is a key supplier of oil to the United States and
its currency is often influenced by the price of crude .
 (Reporting by Frank Pingue; Editing by James Dalgleish)