News Column

Canadian dollar drifts lower, traders look for interest rate guidance

August 19, 2014

Malcolm Morrison, The Canadian Press



TORONTO - The Canadian dollar was lower Tuesday amid data showing weak inflation in the United States.

The loonie was down 0.22 of a cent to 91.64 cents US as U.S. consumer prices rose in July at the slowest pace in five months, held back by a drop in gasoline prices.

The U.S. Labor Department says consumer prices edged up a seasonally adjusted 0.1 per cent last month, which met expectations.

Over the past 12 months, consumer inflation is up two per cent, meeting a target set by the Federal Reserve, while inflation excluding food and energy is up 1.9 per cent.

The latest read on inflation came ahead of the release of the minutes from the latest Fed interest rate meeting Wednesday. Then, on Friday, Fed chairwoman Janet Yellen delivers the keynote address at the central bank's annual meeting in Jackson Hole, Wyo.

There was also further indication of a rebound in the U.S. housing sector as home construction jumped 15.7 per cent in July to an annualized rate of 1.09 million, the fastest pace in eight months.

A calmer geopolitical backdrop seemed to also support markets Tuesday.

Russian Foreign Minister Sergey Lavrov said issues related to sending a humanitarian convoy to Ukraine were resolved following weekend talks in Berlin with his counterparts from Ukraine, Germany and France. Germany'sFrank-Walter Steinmeier reported progress on "some issues," though Lavrov said there was no decision on establishing a cease-fire between the government and pro-Russian rebels.

Prices were mainly higher on the commodity markets where September crude on the Nymex rose 45 cents to US$96.86. September copper was unchanged at US$3.11 a pound and December bullion gained $2.20 to US$1,301.50.


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Source: Canadian Press DataFile


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