BS: Canadian Dollar Heads for Weekly Decline Before Inflation Report
The Canadian dollar headed for a weekly loss before a report forecast to show inflation remains stuck at the bottom end of the central bank’s target band.
The currency fluctuated against its U.S. peer today before the report forecast to show Canadian consumer prices rose 1 percent in November from a year earlier, topping the 0.7 percent increase last month, according to the median of 21 economists in a Bloomberg survey. Bank of Canada Governor Stephen Poloz cited the risk of low inflation as his reason for dropping the bank’s bias to raise interest rates earlier this year. The bank’s target band is 1 percent to 3 percent.
“The Bank of Canada has been far from quiet as regards their discomfort with the level of inflation,” Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of Commerce, said in a note to clients. “Should we see a downside CPI miss,” that “favors a test of C$1.0725, with pre-release dips back to C$1.0650 providing good intra-day buying opportunities.”
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The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, fell 0.1 percent to C$1.672 per U.S. dollar at 7:59 a.m. in Toronto. It is down 0.8 percent this week. One loonie buys 93.70 U.S. cents.
To contact the reporter on this story: Cecile Gutscher in Toronto at cgutscher@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
