Loonie Declines to Lowest in Several Months on Poor CPI Growth
The Canadian dollar slumped today as consumer inflation frustrated market participants, being lower than forecast. That fueled speculations that the Bank of Canada will not be able to raise interest rates in the near future. The loonie reached the lowest level in two months against the US dollar and the four-month low versus the euro.
The Canadian Consumer Price Index rose 0.2 percent in September, slowing from the August growth by 0.4 percent. The annual growth was 1.2 percent, the same in the previous month. The weak inflation figures added to speculations that nation’s economic growth will slow and the central bank will delay an interest rate hike.
Crude oil slipped as much as 2.1 percent to $90.17 per barrel in New York, adding to the downside momentum of Canada’s currency. The Standard & Poor’s 500 Index of shares declined 1.7 percent, falling for the second day. All in all, the last day of the trading week was not good for the loonie.
USD/CAD closed at 0.9930 after rising from 0.9851 to 0.9937 — the highest rate since August 24. EUR/CAD was up from 1.2871 to 1.2945, the highest price since June 29, before closing at 1.2928. CAD/JPY fell from 80.45 to 79.81.
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Earlier News About the Canadian Dollar:
- Canadian Dollar Snaps Three-Day Drop (2012-10-18)
- Carney's Speech Makes Canadian Dollar Weak (2012-10-17)
- Canadian Dollar Gains Ground on Better than Expected US Data (2012-10-15)
- Canadian Dollar Climbs After Trade Deficit Narrows (2012-10-11)
- CAD Stronger vs. Greenback, Down vs. USD & JPY (2012-10-09)