BLBG:Canadian Dollar Falls to 3-Week Low on Bets Inflation Stopped
The Canadian dollar fell to its lowest point in three weeks against its U.S. counterpart before a report forecast to show inflation stopped altogether in April, bolstering the case for lower interest rates.
The Canadian dollar fell against the majority of its 16 most-traded peers on the report expected to show the cost of living was unchanged in April after gaining 0.2 percent the previous month, according to a Bloomberg survey of 22 economists. The currency was headed for its largest weekly loss in a year on speculation the Federal Reserve will stop devaluing its currency through asset purchases. The Bank of Canada targets an inflation rate between 1 and 3 percent.
“There is certainly a smattering of comments now contemplating why isn’t the central bank contemplating lowering rates,” Dean Popplewell, head analyst in Toronto at the online currency-trading firm Oanda Corp., said by phone from Toronto before the report. “Policy-wise, we’re still very much walking a tightrope.”
The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, fell 0.7 percent to C$1.0264 per U.S. dollar at 8:14 a.m. in Toronto. It touched C$1.275, the weakest since April 24, and is down 1.6 percent on the week. One loonie buys 97.43 U.S. cents.
To contact the reporter on this story: Ari Altstedter in Toronto at aaltstedter@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
