TORONTO – The Canadian dollar was lower ahead of the Bank of Canada’s announcement on interest rates Wednesday morning as economic concerns continued to exert pressure on commodity prices.

The loonie fell 0.54 of a cent to 97.45 cents US.

The central bank is expected to leave its key rate unchanged at one per cent and most economists don’t expect the bank to raise it until the third quarter of next year at the earliest. But traders will be interested to see what the bank has to say on economic growth.

On Tuesday, the International Monetary Fund said that Canada’s economy will likely slow to about 1.5 per cent this year from 1.8 last year, before picking up to 2.4 per cent in 2014.

Oil and copper prices retreated a day after the IMF also lowered it global economic growth projections. The IMF cut its forecast for global growth to 3.3 per cent this year, down from its forecast in January of 3.5 per cent. The IMF predicts that government spending cuts will slow U.S. growth and keep the euro currency alliance in recession.

The IMF is keeping its prediction of four per cent global growth in 2014.

Further prospects for a sluggish recovery sent the May crude contract on the New York Mercantile Exchange down $1.27 to US$87.45 a barrel.

Copper, viewed as an economic bellwether, slid 12 cents to US$3.19 a pound.

Both oil and copper sustained steep declines on Monday in the wake of Chinese growth data that failed to meet expectations. The world’s second-largest economy grew by at a 7.7 per cent rate in the most recent quarter, crushing hopes for growth of around eight per cent.

That prompted some private sector economists to cut their full-year growth forecasts for China, although they remained at a still robust level of just under eight per cent. The World Bank reduced its growth outlook this week from 8.4 per cent to 8.3 per cent.

On Wednesday, China’s government promised steps to boost domestic consumption as a driver of the economy.

Gold prices continued to back off after an attempt at a rally Tuesday. The June contract on the Nymex fell $10.80 to US$1,376.60 an ounce, adding to a $140 tumble on Monday.

There have been a few reasons advanced for the steep drop in gold prices that started last week, including the prospect of troubled eurozone countries selling off part of their gold reserves to tackle their debt problems.