Loonie advances as rising energy prices send March inflation higher
TORONTO - The Canadian dollar closed higher Thursday amid data showing inflation coming in slightly higher than expected.
The loonie was up 0.04 of a cent to 90.8 cents US as Statistics Canada reported that the consumer price index rose 0.6 per cent in March from the previous month, higher than the 0.4 per cent reading that economists had expected. The rise was mostly due to a three per cent increase in gasoline prices from February.
Excluding volatile items such as food and energy, the core rate of inflation rose 0.3 per cent, which was in line with expectations.
Year over year, the consumer price index was up 1.5 per cent, up from 1.1 per cent in February.
"Looking ahead, gasoline and natural gas prices are likely to put further pressure on the headline rate in April, but it will be a somewhat slower climb to get core prices to two per cent," said Avery Shenfeld, chief economist at CIBC World Markets.
The dollar had slid 1/3 of a cent Wednesday in the wake of the Bank of Canada's announcement that it was leaving its key rate at one per cent, where it's been since September 2010. The bank also lowered its forecast for first-quarter growth this year to 1.5 per cent from 2.5 per cent, but attributed the downgrade mostly to temporary impacts of a unusually severe winter.
But the loonie rebounded Thursday as the "higher than expected Canadian inflation has shifted expectations back toward a firmly neutral from the neutral-dovish reaction to . . . (Wednesday's) Bank of Canada statement," said Colin Cieszynski, senior market analyst at CMC Markets.
Commodities were mixed as the May crude contract on the New York Mercantile Exchange rose 54 cents to US$104.30 a barrel.
May copper rose two cents to US$3.05 a pound while June gold bullion declined $9.60 to US$1,293.90 an ounce.
Read more Business News
- Family condemns RCMP BC
- Child pornography sentencePenticton / S. Okanagan
- Bobbitt hearing continuesPenticton / S. Okanagan
- Inquest into teen's Mill deathVernon / N. Okanagan
|QHR Technologies Inc||1.12||+0.01|
|Anavex Life Sciences||0.191||+0.001|
|Copper Mountain Mining||1.99||+0.05|
|Sunrise Resources Ltd||0.06||0.00|
|Mission Ready Services||0.45||0.00|
This time of year, I always worry about which friends of mine will get caught going off the road in adverse weather conditions. With a little preparation most accidents can be avoided. Having won the...
Photo: Thinkstock.comThe end of record-low rates is nigh, according to one major bank, which has taken a stance and predicted when the Bank of Canada will raise its long-standing overnight rate. &ldq...
The third week in October is “Small Business Week”, a week dedicated to supporting local, small businesses. The week was designed to bring awareness to Canadians about the role small busin...