Canadian Dollar Touches Four-Month Low Before Inflation ReportAri Altstedter
The Canadian dollar fell to its lowest level in more than four months before a report projected to show inflation fell below the Bank of Canada’s target, an indicator the central bank has said will help determine policy.
The currency weakened against the majority of its most-traded peers along with its commodity exporting counterparts Australia and New Zealand after Reserve Bank of Australia Governor Glenn Stevens left open the possibility of intervention to stop Aussie strength. The Canadian dollar has depreciated in the past month since the central bank signaled its next move on interest rate wouldn’t necessarily be higher.
“It does look like just a general rotation out of the commodity currencies dragged CAD through the key technical levels,” said Greg Anderson, head of global foreign exchange strategy at Bank of Montreal, by phone from New York. If the report this morning shows inflations slowed, “it’s just a bad headline to add to what’s already not constructive price action.”
The loonie, as the Canadian dollar is known for the image of the waterfowl on the C$1 coin, fell 0.3 percent to C$1.0544 per U.S. dollar at 7:43 a.m. in Toronto. Earlier it touched C$1.0569 per U.S. dollar, the lowest since July 9. One loonie buys 94.84 U.S. cents.
The annualized consumer price index increase slowed to 0.8 percent in October from 1.1 percent the previous month, according to a Bloomberg survey of 19 economists. The central bank targets inflation between 1 percent and 3 percent.
Another report will show Canadian retail sales rose 0.3 percent in September from 0.2 percent the previous month, a separate survey showed.