Loonie lower, greenback strengthens: Fed minutes show growing debate about rates
TORONTO - The Canadian dollar closed lower Wednesday as the release of the minutes of the latest meeting of the U.S. Federal Reserve showed a sharpening debate within the central bank about when to hike rates.
The loonie was down 0.23 of a cent at 91.15 cents US as the Fed also continued to indicate that the central bank is in no rush to raise rates from close to zero, where they have been since the financial crisis.
The minutes showed that some officials thought the Fed would need to call for "a relatively prompt move" to reduce the stimulus it has supplied since the financial crisis erupted in 2008. Otherwise, these officials felt the Fed risked overshooting its targets for unemployment and inflation.
Those who think the Fed should withdraw its support only slowly cited persistent drags on the job market despite solid hiring and a steady drop in the unemployment rate.
The Fed has emphasized that economic data, not the calendar, will determine when it hikes rates, generally expected around the middle of 2015.
Slack in the labour market has been a particular concern, a topic that Fed chairwoman Janet Yellen is expected to address in her speech to the central bank's economic symposium at the end of the week.
While U.S. job growth has been coming in at around 200,000 monthly, the participation rate has drifted down to a percentage in the lows 60s.
The loonie had traded higher in the morning after Statistics Canada reported that wholesale sales rose 0.6 per cent to $53 billion in June, a third consecutive increase.
The agency said that sales in the vehicle sector declined 2.4 per cent to $9.1 billion. But this was offset by gains in five subsectors, led by a 3.1 per cent rise in the miscellaneous subsector, which includes agricultural supplies, wholesalers of logs and wood chips, minerals, ores and precious metals, and second-hand goods
Prices were mixed on commodity markets with the September crude contract â€” which expires Wednesday â€” was up $1.59 to US$96.07 a barrel. The October contract climbed 59 cents to US$93.45. Prices rose as data showed a drop in U.S. supplies of about 4.5 million barrels last week, about three times the amount that had been expected.
September copper shot up nine cents to US$3.18 a pound. Some analysts attributed the jump to strong signs of a rebound in the U.S. housing sector, including strong data on housing starts and a jump in a prominent builders confidence survey.
December gold bullion dipped $1.50 to US$1,295.20 an ounce.
Read more Business News
- Banished from community?Poll - 9:09 pm
- Weed oil fire burns twoKelowna - 6:25 pm
- Rose vows to end wasteMunicipal Elections 2014 - 6:59 pm
- Judge: Banishment OKKamloops - 6:57 pm
|QHR Technologies Inc||1.11||+0.06|
|Anavex Life Sciences||0.19||-0.0015|
|Copper Mountain Mining||1.94||+0.09|
|Sunrise Resources Ltd||0.06||0.00|
|Mission Ready Services||0.45||+0.06|
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...