Canada’s dollar rose for a third day as consumer prices increased last month more than economists forecast, making it more likely that the central bank will resume boosting borrowing costs.
The currency advanced earlier versus the greenback as an increase in stocks and commodities before the Greek parliament’s vote on budget cuts spurred demand for higher-yielding assets.
“Way above expectations,” said C.J. Gavsie, managing director for foreign-exchange trading at Bank of Montreal’s BMO Capital Markets unit in Toronto, referring to the inflation figures. “This is all just adding together with the Greek news. We’re off to the races with a strong Canadian dollar.”
The loonie, as the Canadian currency is also known for the image of the aquatic bird on the C$1 coin, appreciated 0.8 percent to 97.32 cents per U.S. dollar at 7:11 a.m. in Toronto, from 98.12 cents yesterday. One Canadian dollar buys $1.0275.
Consumer prices advanced 0.7 percent in May after a 0.3 percent gain in the previous month, Statistics Canada said today in Ottawa. The median forecast of 24 economists in a Bloomberg News survey was for an advance of 0.3 percent.
The Bank of Canada kept its benchmark overnight lending rate at 1 percent on May 31, where it has been since September. The central bank was expected to raise its target rate for overnight lending to 1.5 percent by the end of the year.
Futures on the Standard & Poor’s 500 Index expiring in September increased 0.7 percent. Crude oil for August delivery gained 1.3 percent to $94.09 a barrel.
The Greek parliament votes today on Prime Minister George Papandreou’s 78 billion-euro ($112 billion) austerity plan, needed before the cash-strapped nation can tap a fifth portion of last year’s 110 billion-euro rescue and euro-area finance ministers can approve a second aid package.
To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
