By KAREN JOHNSON The Canadian dollar is modestly weaker against a broadly firmer U.S. dollar Monday morning, shrugging off positive U.S. economic data to extend recent losses. "The fallout from the dovish BOC and weaker than expected CPI inflation continues," said Adam Cole, global head of foreign exchange strategy at RBC Capital Markets. The U.S. dollar was at C$1.0081 Monday morning, from C$1.0058 late Friday, according to data provider CQG. The U.S. dollar has been grinding higher against a weaker Canadian dollar since last week, when the Bank of Canada held its key policy rate steady at 1%, and delivered a more dovish policy statement, saying the case for rate hikes in Canada had become "less imminent." The central bank also ratcheted down its growth expectations and delayed its timing for the closing of the output gap, suggesting rate hikes might be more than a year away. Softer-than-expected inflation results for December on Friday bolstered the perception the inflation-targeting central bank would be sidelined for some time. Expectations that the Bank of Canada would be the next major central bank to raise interest rates had been a key pillar of Canadian dollar support. In U.S. data, orders for long-lasting manufactured goods in December increased at twice the rate expected, helped by defense and transportation spending.

Source