By Malcolm Morrison TORONTO _ The Canadian dollar fell to 3 1/2 year lows Thursday while the greenback rallied as a result of the Federal Reserve's move to cut back on its bond purchases. The loonie was down 0.26 of a cent to 93.29 cents US, on top of a tumble of almost 3/4 of a cent Wednesday, after the Fed said it was cutting its monthly bond and asset purchases by $10 billion to $75 billion starting in January. Further cuts will depend on economic data, particularly jobless levels and inflation. The Fed also emphasized that short-term rates aren't going up any time soon. The tapering of asset purchases will be the first step toward winding down a program that has been in place since the 2008 financial crisis. The quantitative easing kept long-term rates low and supported strong gains on many equity markets this year. On the commodity markets, bullion prices resumed sliding after the Fed moved to cut back on its latest quantitative easing. QE had supported gold prices because of inflationary fears. But inflation is tame in many countries and data out earlier this week showed the consumer price index rising at an annual rate of only 1.2 per cent, significantly below the Fed's inflation target of two per cent. The February gold contract on the New York Mercantile Exchange fell $30.10 to US$1,204.90 an ounce, its lowest level since June. Gold prices are down 39 per cent so far this year. Elsewhere, January crude gained a dime to US$97.90 a barrel while March copper slipped two cents to US$3.30 a pound.
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