The Canadian Press - ONLINE EDITION

Canadian dollar erases early losses as inflationary pressures grow

  • Print

TORONTO - The Canadian dollar closed higher Friday as the latest inflation data showed rising price pressures, suggesting that a rate cut by the Bank of Canada is off the table.

The loonie moved away from the lows of the morning and was up 0.2 of a cent at 92.0 cents US as Statistics Canada reported the consumer price index for April rose at an annualized rate of two per cent, in line with expectations and up from 1.5 per cent the previous month.

"We believe this could prove a spark for the Bank (of Canada) to begin toning down its focus on 'downside risks to inflation', that has provided a dovish tinge to their official neutral bias, possibly as soon as the next rate meeting on June 4," said Mark Chandler, head of Canadian FIC strategy at RBC Dominion Securities.

On a monthly basis, the CPI was up 0.3 per cent, lower than the 0.4 per cent reading that had been forecast.

In the U.S., positive housing data helped send markets higher heading into the U.S. Memorial Day long weekend.

The annual rate for new home sales in April rose to 433,000, up from a revised 407,000 in March and better than the 429,000 reading that economists expected. But that is still below levels of 446,000 a year ago.

Figures released Thursday showed sales of existing homes rose 1.3 per cent in April, the fastest pace since December.

Elsewhere on the economic front, a closely watched survey showed that German business confidence has dipped, with companies less optimistic about both their current situation and the outlook for the next six months. The Ifo institute said Friday that its confidence index, a key indicator for Europe’s biggest economy, slipped to 110.4 points this month from 111.2 in April.

Standard & Poor’s rating agency has upgraded Spain's sovereign credit grade a notch to BBB, the third agency to do so in recent months and a further sign the country is turning the corner after five years of economic turmoil. The agency cited improved economic prospects and praised the conservative government’s structural and labour reforms since 2010.

On the commodity markets, July crude in New York gained 61 cents to US$104.35 a barrel.

June gold bullion faded $3.30 to US$1,291.70 an ounce, while July copper rose three cents to US$3.17 a pound.

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

Fringe, space motifs trendy for teens heading back to school

View more like this

Photo Store Gallery

  • MIKE.DEAL@FREEPRESS.MB.CA 100615 - Tuesday, June 15th, 2010 The Mane Attraction - Lions are back at the Assiniboine Park Zoo. Xerxes a 3-year-old male African Lion rests in the shade of a tree in his new enclosure at the old Giant Panda building.  MIKE DEAL / WINNIPEG FREE PRESS
  • Jia Ping Lu practices tai chi in Assiniboine Park at the duck pond Thursday morning under the eye of a Canada goose  - See Bryksa 30 Day goose challenge Day 13- May 17, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

What do you think of the new Blue Bombers uniforms?

View Results

View Related Story

Ads by Google