By Commodity News Service Canada
July 12 (CNS Canada) – The Bank of Canada is raising its key overnight interest rate to .75 per cent from .5 per cent, marking the first interest rate hike in seven years. Canada’s central bank is also the first western nation central bank to follow the United States Federal Reserve and begin the process of backing away from a policy that focused heavily on keeping inflation low and encouraging investment through economic stimulus.
“Recent data have bolstered the bank’s confidence in its outlook for above-potential growth and the absorption of excess capacity in the economy,” a statement from the Bank of Canada said.
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The Canadian dollar was slightly down shortly after the Bank of Canada interest rate increase. It was 77.35 cents U.S. at 9:22 a.m. CDT (C$1.2928). The loonie closed Tuesday at 77.40 cents U.S. (C$1.2920).
The S&P/TSX was up 90.43 points (.6 per cent) to 15,239.57 at 9:22 a.m. CDT. The Dow Jones was up 154 points (.75 per cent) to 21,563.09, the S&P 500 was up 18.28 points (.75 per cent) to 2,443.81 and the Nasdaq was up 58.24 points (.94 per cent) to 6,251.54.
A consortium of private oil companies has discovered oil in the southern waters of the Gulf of Mexico. The find, believed to be of about a billion barrels was announced by Premier Oil, Sierra Oil and Gas and Talos Energy.
Brazilian base metal maker Votorantim Metais Holding (VMH) is attempting to raise C$750 million through a public offering on the Toronto Stock Exchange. The initial offering would place a C$4 billion valuation on the company.
WTI crude oil was selling at US$46.18 this morning, up 1.14 cents U.S. (2.53 per cent).
