BS: Canadian Dollar Declines Before June Consumer Inflation Report
The Canadian dollar fell versus the majority of its most-traded peers before June consumer price index data that is forecast to remain below the Bank of Canada’s 2 percent inflation target.
Canada’s currency rose yesterday versus its U.S. counterpart after wholesale sales rose at the fastest pace in more than two years in May. Bank of Canada Governor Stephen Poloz said this week that the nation’s economy has significant slack and inflation remains muted, pushing back the potential for an interest-rate cut.
“Governor Poloz has commented that protecting the inflation mandate from the low and high side is important,” Camilla Sutton, head of currency strategy at Bank of Nova Scotia, wrote in a note to clients. “Should CPI not begin to trend higher, it will invoke a policy response, likely a signal that interest rates in Canada are on hold for longer than is currently priced in.”
The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, was little changed at C$1.0377 per U.S. dollar at 7:49 a.m. in Toronto. The currency has increased 1.4 percent versus the greenback this month. One loonie buys 96.37 U.S. cents.
To contact the reporter on this story: Joseph Ciolli in New York at jciolli@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
