News Column

Canadian dollar rises after steep loss, traders look to rate announcement

July 14, 2014

Malcolm Morrison, The Canadian Press

TORONTO - The Canadian dollar was slightly higher Monday as traders focus on the release Wednesday of the Bank of Canada's latest word on interest rates and its latest Monetary Policy Report.

The loonie was up 0.09 of a cent to 93.25 cents US.

The loonie had tumbled 3/4 of U.S. cent on Friday in the wake of disappointing jobs data that saw the loss of 9,500 jobs during June.

The central bank is universally expected to leave its key rate at one per cent, where it has been for almost four years. That means traders will particularly focus on the bank's assessment of how the economy is performing amid rising inflation.

"We will also be looking for any comments about the recent strengthening of the Canadian dollar and the risks that it may pose for their assumption of strengthening exports," said Mark Chandler, Head of Canadian FIC Strategy at RBC Dominion Securities.

The currency has lately been hovering around the 94 cent US level. It had been trading around 90 cents US for much of the year but found buoyancy from rising oil prices, stronger than expected housing data and higher inflation.

Investors will also focus on monetary policy testimony from U.S. Federal Reserve chair Janet Yellen on Tuesday and Wednesday.

"While much of the impact of the semi-annual address has waned with the (Fed) now providing quarterly forecast updates, we would expect some questions on the timing of future rate increases," added Chandler.

"Also on Wednesday, the (Fed's latest regional economic survey) will be released and should, on the basis of recent job figures, be a relatively upbeat compendium of economic conditions."

Commodities were lower as August crude on the New York Mercantile Exchange slipped 11 cents to US$100.72 a barrel.

Metals also declined with September copper down a cent to US$3.25 a pound while August bullion dropped $22.90 to US$1,314.50 an ounce.

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Source: Canadian Press DataFile

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