Monday, October 5th6.8°C

Lower down: BoC leaves rates unchanged, traders look to disappointing trade data

TORONTO - The Canadian dollar closed lower Wednesday as the Bank of Canada kept its key interest rate unchanged at one per cent.

The loonie was down 0.24 of a cent to 91.42 cents US as the central bank signalled it is in no rush to raise rates from that level, where it's been since September 2010 as the global economy continues its slow recovery.

"The Canadian dollar fell lower on the Bank of Canada continuing to harp a tone of we're still nowhere close to raising interest rates," said Rahim Adhavji at Knightsbridge Foreign Exchange.

"It seems that the Bank of Canada is quite content with the lower Canadian dollar boosting exports and assisting with inflation."

Traders also digested data that showed Canada's trade balance slipped into deficit territory during April. Statistics Canada said Canada's merchandise exports declined 1.8 per cent while imports increased 1.4 per cent, taking Canada's trade balance with the world from a surplus of $766 million in March to a deficit of $638 million.

In addition, traders are also awaiting an announcement on possible stimulus measures aimed at helping the eurozone recovery and the release of U.S. and Canadian jobs numbers coming out at the end of the week.

Markets are counting on European Central Bank president Mario Draghi to announce measures Thursday that will give a lift to the eurozone's weak recovery and save the region from falling into a deflationary spiral that would choke off growth.

Worries about deflation increased Tuesday in the wake of data showing that inflation in the eurozone came in at 0.5 per cent in May, down from 0.7 per cent in April. The latest data also showed that gross domestic product in the eurozone grew by a paltry 0.2 per cent in the first quarter.

Analysts are looking at a variety of options for the ECB, including an interest rate cut or a form of quantitative easing.

On Friday, traders will see if there will be a strong reading from the U.S. non-farm payrolls report. Economists forecast that about 219,000 jobs were created during May following a much stronger expected 288,000 gain in April.

Ahead of that report, payroll firm ADP reported Wednesday that the U.S. private sector created 179,000 jobs last month.

Canadian job figures for May also come out Friday and economists expect about 21,000 jobs were created after the economy shed 29,000 the previous month.

On the commodity markets, the July crude contract on the New York Mercantile Exchange slipped two cents to US$102.64 a barrel.

August bullion faded 20 cents to US$1,244.30 an ounce and July copper fell four cents to US$3.09 a pound.

The Canadian Press

Read more Business News


Recent Trending

Today's Market
S&P TSX13552.20+212.46
S&P CDNX529.91+4.35
S&P 5001987.05+35.69
CDN Dollar0.7652+0.0008
Natural Gas2.468+0.018

Okanagan Companies
Pacific Safety0.215+0.000
QHR Technologies Inc1.22+0.03
Metalex Ventures0.06+0.00
Russel Metals22.51+1.03
Copper Mountain Mining0.50+0.08
Colorado Resources0.07-0.01
ReliaBrand Inc0.004-0.000
Sunrise Resources Ltd0.02+0.00
Mission Ready Services0.095+0.005
Decisive Dividend Corp3.49+0.00
Diamcor Mining0.90+0.02


2238081322 - 3880 Truswell Road
3 bedrooms 4 baths
more details
Click here to feature your property
Please wait... loading

Perfect (reno'd) home

Photo: Thinkstock.comHow many times have you found a home in the perfect location, but it needs too much work as per the home inspection? There is a great program available through most lenders that w...

Living beyond 100

Photo: ContributedThere was a time most careers involved an apprenticeship of one sort another. Some official, others involving years of servitude, and others time simply spent watching and emulating ...

5 Claim misconceptions

Photo: Thinkstock.comIf you have been hurt in an accident or as a result of medical negligence you will likely look to your friends and family for some advice on how to deal with the situation. These ...




Member of BC Press Council