C$ strengthens ahead of Bank of Canada interest rate decision

The data could support a view that the domestic economy slowed in the fourth quarter. The Canadian dollar was
22 Jan, 2020
  • The data could support a view that the domestic economy slowed in the fourth quarter.
  • The Canadian dollar was trading 0.2pc higher at 1.3047 to the greenback, or 76.65 U.S. cents.
  • Canada is a major exporter of commodities, including oil, so its economy could be hurt by a slowdown in the global economy.

Canada's annual inflation rate held steady at 2.2pc in December, Statistics Canada said, while the average of the Bank of Canada's three measures of core inflation was 2.1pc.

The central bank aims to keep inflation at 2pc.

Separate data from Statistics Canada showed that wholesale trade fell for the third time in five months in November, declining 1.2pc. Analysts had predicted wholesale trade would hold steady.

The data could support a view that the domestic economy slowed in the fourth quarter.

The Bank of Canada is due to update its outlook for the economy at 10 a.m. (1500 GMT), when it is expected to leave its benchmark interest rate on hold at 1.75pc.

At 9:15 a.m. (1415 GMT), the Canadian dollar was trading 0.2pc higher at 1.3047 to the greenback, or 76.65 U.S. cents.

The currency traded in a range of 1.3036 to 1.3091.

The gain for the loonie came as updates from China about the spread of a new flu-like coronavirus raised hopes the outbreak would be contained, boosting world stock markets.

Canada is a major exporter of commodities, including oil, so its economy could be hurt by a slowdown in the global economy.

U.S. crude oil futures were down 1.70pc at $57.39 a barrel as a market surplus forecast by the International Energy Agency (IEA) outweighed concern over disruptions to Libya's crude output.

Canadian government bond prices were lower across the yield curve, with the two-year down 1.5 Canadian cents to yield 1.630pc and the 10-year  falling 12 Canadian cents to yield 1.530pc.

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