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This article was published 15/7/2013 (1495 days ago), so information in it may no longer be current.
TORONTO - The Canadian dollar was lower Monday, losing some of last week's surge of more than a cent, amid data showing China's growth coming in better than some had expected, and ahead of the Bank of Canada's first policy rate decision.
The loonie was down 0.17 of a cent to 96.02 cents US as central bank's new governor, Stephen Poloz, prepares to issue his first policy decision since taking over in early June. Traders will take in the latest interest rate decision by the central bank and the BoC's latest Monetary Policy Report on Wednesday.
Markets don't expect the bank to move on rates until at least well into next year. But traders will be looking for changes in the language of the bank's statement for clues as to when it might hike rates from 1.25 per cent.
The decline in the loonie Monday followed a jump of more than 1 1/2 cents US last week. The U.S. dollar weakened after U.S. Federal Reserve chairman Ben Bernanke reassured markets that the U.S. needs a "highly accommodative monetary policy," or low interest rates, for the foreseeable future. The Fed is buying $85 billion a month in bonds to keep interest rates low.
There was relief that a slowdown in China's economic growth wasn’t as sharp as previously thought.
The world’s second-largest economy grew 7.5 per cent from a year earlier in the second quarter, slowing from the previous quarter’s 7.7 per cent, as weak trade and a clampdown on lending took their toll.
A clampdown on risky lending at state banks had contributed to worries that China’s growth might fall below seven per cent.
Other data showed that growth in Chinese factory output slowed to 9.3 per cent for the first half of the year, down 0.2 percentage points from the first quarter’s rate.
And retail sales growth decelerated to 12.7 per cent for the first quarter, declining by 1.7 percentage points from a year earlier.
Signs of slowing Chinese growth depressed metal prices with the September copper contract on the New York Mercantile Exchange down a cent to US$3.14 a pound.
Oil advanced with the August contract on the Nymex up 37 cents to US$106.32 a barrel.
Oil is up about 10 per cent so far this month, jolted higher by unexpectedly sharp drops in U.S. crude and gasoline inventories, which suggest stronger demand.
August bullion erased earlier losses and gained $5.90 to US$1,283.50 an ounce.
Other data showed showed a mixed reading on U.S. retail sales last month.
While overall sales were up, much of that increase was driven by higher gas prices and volatile auto sales. Core retail sales rose just 0.15 per cent, the weakest showing since January.
The report from the U.S. Commerce Department showed some weakness at retail stores, particularly department stores.