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* C$ weakens to C$1.0005 to the greenback, or $0.9995
* C$ at softest since Nov. 19
* Bank of Canada slashes growth forecast, rate hikes "less imminent"
By Alastair Sharp
TORONTO, Jan 23 (Reuters) - The Canadian dollar tumbled to trade for less than equal value with the U.S. dollar on Wednesday after the Bank of Canada held interest rates steady and said a future rate hike was "less imminent" as it reduced its growth forecasts.
The plunge to a two-month low came after the central bank dramatically revised its growth assumptions and said the Canadian economy likely grew by 1 percent annualized in the fourth quarter, after initially predicting 2.5 percent growth.
"Given the tone ... it's not surprising that the Canadian dollar would weaken on the statement because the market probably will push forward its outlook for interest rates, possibly into 2014," said Sal Guatieri, a senior economist at BMO Capital Markets.
Overnight index swaps, which trade based on expectations for the central bank's key policy rate, showed that after the announcement traders reduced their bets on a rate hike in late 2013.
The Canadian dollar weakened to as low as C$1.0005 to the greenback, or $0.9995, from C$0.9930 just before the news and C$0.9927 at Tuesday's North American close. That was its weakest level since Nov. 19.
Dizzying household credit growth and a hot housing market had been a top concern of both the central bank and the finance ministry, but the bank's language on Wednesday signaled the belief that this was getting under control.
This could be interpreted as a reason to shy away from raising rates, which could make the Canadian currency and its government bonds less attractive to international investors.
Unlike most of its developed economy peers, Canada's central bank has indicated it will look to raise interest rates once conditions allow, which economists had interpreted to mean late this year or early in 2014.
"The Bank of Canada stood out as the most hawkish (central bank in a) G-7 country over the past two years or so," said Jimmy Jean, an economic strategist at Desjardins. "This is where they're coming off that pedestal. It's no longer the outlier."
The price of Canadian government debt rose across the curve, sending yields lower. The two-year bond was up 9 Canadian cent to yield 1.127 percent and the benchmark 10-year bond jumped 39 Canadian cents to yield 1.869 percent.