Canadian dollar edges lower, traders look to Bank of Canada rate announcement
TORONTO - The Canadian dollar was slightly lower Monday as traders look ahead to the Bank of Canada's next scheduled interest rate announcement on Wednesday.
The loonie dropped 0.14 of a cent to 97.22 cents US.
No one expects Canada's central bank to change its key rate from one per cent because of persistently weak economic conditions but it could make subtle changes in the language of its statement about its interest rate intentions.
The tepid pace of the economy was highlighted Friday when data showed fourth quarter growth came in at an annualized rate of 0.6 per cent, with growth actually contracting during December.
"Although Friday’s Q4 GDP release came in line with expectations . . . it was also below the Bank of Canada's forecast from the January Monetary Policy Report," said Scotia Capital currency strategist Eric Theoret.
"As such, there is the risk of a further moderation in the BoC’s hawkish bias."
At its last meeting in late January, the bank lowered its economic estimates.
That was enough to push the loonie below parity with the greenback, where it has stayed ever since, falling to an eight-month low. And economists don’t expect it to rise above parity anytime soon.
There is plenty of major economic data coming down this week.
On Friday, Statistics Canada releases the February jobs report.
Economists anticipate job creation for February to come in at 8,000 after a plunge of 22,000 positions during January, with the jobless rate edging up 0.1 of a point to 7.1 per cent.
The U.S. government's employment report for February also comes out Friday. It is expected that the economy cranked out 155,000 jobs, roughly the same amount as January.
Commodity prices advanced after losing ground on Friday.
The April crude contract on the New York Mercantile Exchange edged up 17 cents to US$90.85 barrel.
May copper rose two cents to US$3.52 a pound while April bullion gained $6 to US$1,578.30 an ounce.