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Loonie dips ahead of BoC rate announcement

Canadian Press, The Canadian Press
1 Comment| July 15, 2014

TORONTO _ The Canadian dollar was lower a day before the Bank of Canada delivers its latest announcement on interest rates.

The loonie was down 0.15 of a cent to 93.18 cents US.

The central bank is universally expected to hold its key rate at one per cent, where it's been since September 2010, as the global economy slowly recovers from the financial collapse of 2008 and the subsequent recession.

Traders will be particularly interested in what the bank has to say about the economy and how conditions could be impacted by a stubbornly high Canadian dollar.

``The BoC risk is that Governor Poloz strikes a cautious tone, highlighting that a strong (currency) risks weighing on important economic fundamentals,'' said Camilla Sutton, chief FX strategist and managing director of Scotiabank's global banking and markets operations.

Meanwhile, the markets will also focus on Janet Yellen over the next two days as the U.S. Federal Reserve chair delivers testimony to Congressional committees on the economy and monetary policy. Analysts say her comments will be closely watched for clues as to how she will manage monetary policy in the coming months. They say she is expected to sound optimistic about the economy, but not so positive as to give a hint of any tightening.

On the economic calendar, data showed U.S. retail sales for June rose by 0.2 per cent, less than the 0.6 per cent gain that had been expected. Excluding autos, sales rose 0.4 per cent.

Commodity prices were mixed with August crude on the New York Mercantile Exchange down 69 cents to US$100.22 a barrel.

September copper was unchanged at US$3.25 a pound while August bullion gained $3.80 to US$1,310.50 an ounce.

Tags: ETF

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