Accessibility/Mobile Features
Skip Navigation
Skip to Content
Editorial News
Business
Classified Sites

The Canadian Press - ONLINE EDITION

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

Canadian dollars (loonies) are pictured in Vancouver, Sept. 22, 2011. THE CANADIAN PRESS/Jonathan Hayward

Enlarge Image

Canadian dollars (loonies) are pictured in Vancouver, Sept. 22, 2011. THE CANADIAN PRESS/Jonathan Hayward

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.

  • Rate this Rate This Star Icon
  • This article has not yet been rated.
  • We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

    You can also register and/or login to the site and join the conversation by leaving a comment.

    Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Commentscomment icon

You can comment on most stories on brandonsun.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Commentcomment icon

Comment
  • You have characters left

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.

letters

Make text: Larger | Smaller

Brandon Sun Business Directory
The First World War at 100
Why Not Minot?
Welcome to Winnipeg

Social Media

Canadian Mortgage Rates