The Canadian dollar has slumped moderately lower after news that the Bank of Canada cut its overnight target rate by 50 basis points to 3.00%. The U.S. dollar initially moved to the C$1.0110 area from C$1.0062 just before the bank's policy statement. It subsequently extended its gains, pushing to the C$1.0150 area by midmorning trading before retreating to around C$1.0130. The bank was widely expected to cut by 50 basis points, although some had anticipated only a 25-basis-point reduction. The bank's policy statement said it is now projecting a deeper and more protracted slowdown in the U.S. economy. "This has direct consequences for the Canadian economic outlook, with declining exports projected to exert a significant drag on growth in 2008," the bank said