The Canadian dollar sold off for a third day today, amid data showing tame inflation and changing expectations for the timing of the next interest rate hike by the Bank of Canada.

The currency was 0.31 of a cent lower to 99.4 cents U.S. as Statistics Canada said that Canada’s annual inflation rate was 0.8% in December, the same as in November.

On a month-to-month basis, consumer prices dipped 0.6% from November, more than economists expected. Prices on a number of key items fell in December from the previous month, including gasoline, automobiles and clothing.

The dollar has been under pressure since the Bank of Canada indicated on Wednesday that interest rates will likely rise further down the road than had been expected because of economic weakness. It closed below parity with the greenback Thursday for the first time in over two months.

Recent optimism about improving economies in the U.S. and China continued to help support an upswing in oil prices. The U.S. housing and jobs markets have shown improvement, while China’s manufacturing output has been gaining steam.

The March crude contract on the New York Mercantile Exchange gained 38 cents to US$96.33 a barrel.

February bullion on the Nymex declined $6.10 to US$1,663.80 an ounce while March copper was unchanged at US$3.68 a pound.

Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

Join us on Twitter

Add a comment

Have your say on this topic! Comments that are thought to be disrespectful or offensive may be removed by our Benefits Canada admins. Thanks!

* These fields are required.
Field required
Field required
Field required