The Canadian Press - ONLINE EDITION

Canadian dollar loses ground amid U.S. interest rate concerns, lower commodities

  • Print

TORONTO - The Canadian dollar closed lower a day before the Bank of Canada delivers its latest announcement on interest rates.

The loonie was down 0.38 of a cent at 92.95 cents US.

The central bank is universally expected to hold its key rate at one per cent, where it's been since September 2010, as the global economy slowly recovers from the financial collapse of 2008 and the subsequent recession.

Traders will be particularly interested in what the bank has to say about the economy and how conditions could be impacted by a stubbornly high Canadian dollar.

"The BoC risk is that governor Poloz strikes a cautious tone, highlighting that a strong (currency) risks weighing on important economic fundamentals," said Camilla Sutton, chief FX strategist and managing director of Scotiabank's global banking and markets operations.

Losses in the Canadian currency grew while the greenback strengthened as Federal Reserve chair Janet Yellen delivered testimony to Congressional committees on the economy and monetary policy.

Yellen said in delivering the Fed’s semi-annual economic report to Congress that the economic recovery is not yet complete and the Fed intends to keep providing significant support. But she also said if labour market conditions continue to improve more quickly than anticipated, the Fed could raise its key short-term interest rate sooner than currently projected, the summer of 2015.

The Fed's semi-annual report to Congress also pointed out that some broad equity price indexes have increased to all-time highs in nominal terms since the end of 2013.

It observed that "valuation metrics in some sectors do appear substantially stretched, particularly those for smaller firms in the social media and biotechnology industries."

On the economic calendar, data showed U.S. retail sales for June rose by 0.2 per cent, less than the 0.6 per cent gain that had been expected. Excluding autos, sales rose 0.4 per cent.

Commodity prices were mixed with August crude on the New York Mercantile Exchange down 95 cents at US$99.96 a barrel.

September copper was unchanged at US$3.25 a pound while August gold bullion fell $9.60 to US$1,297.10 an ounce.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Premier, Mayor comment on CMHR opening

View more like this

Photo Store Gallery

  • STDUP ‚Äì Beautiful West End  begins it's summer of bloom with boulevard s, front yards  and even back lane gardens ,  coming alive with flowers , daisies and poppies  dress up a backyard lane on Camden St near Wolseley Ave  KEN GIGLIOTTI  / WINNIPEG FREE PRESS  /  June 26 2012
  • Marc Gallant / Winnipeg Free Press. Local- WINTER FILE. Snowboarder at Stony Mountain Ski Hill. November 14, 2006.

View More Gallery Photos

Poll

Do you think the Scottish independence referendum will have an effect in Canada?

View Results

View Related Story

Ads by Google