Canadian Dollar Falls As BoC Keeps Rate Unchanged
October 25 2017 - 5:47AM
RTTF2
The Canadian dollar weakened against its major rivals in New
York deals on Wednesday, after the Bank of Canada left its
benchmark rate unchanged following a 25 basis-point hike in
September.
The BoC maintained its overnight rate at 1 percent, as
expected.
The recent strength in the Canadian dollar is weighing on
inflation and exports, the bank noted.
Although less monetary policy stimulus is likely to be required
over time, Governing Council would be cautious in making future
adjustments to the policy rate, according to the accompanying
statement.
"The Bank will be guided by incoming data to assess the
sensitivity of the economy to interest rates, the evolution of
economic capacity, and the dynamics of both wage growth and
inflation," it added.
The BoC Governor Stephen Poloz and Deputy Governor Carolyn
Wilkins will host a press conference in Ottawa at 11:15 am ET.
Crude oil prices inched lower after an industry report showed a
surprise build in U.S. stockpiles.
Crude for December delivery fell $0.31 to $52.16 per barrel.
The American Petroleum Institute reported a small build of
519,000 barrels in United States crude oil inventories. While
gasoline supplies plunged, the rise in crude oil inventories
couples with OPEC's sluggish compliance with supply quotas suggests
the global market is still awash in crude oil.
The currency has been trading in a negative territory in the
European session, with the exception of the yen.
The loonie declined to more than a 2-month low of 1.2771 against
the greenback, after having advanced to 1.2635 in the immediate
aftermath of the announcement. The next possible support for the
loonie is seen around the 1.29 region.
Data from the U.S. Department of Commerce showed that orders for
long-lasting manufacturing goods surged in September.
The durable goods orders rose by 2.2% in September. Economists
had expected the figure to rise by 1.0 percent.
The loonie fell to near a 2-month low of 1.5058 against the
euro, off its early high of 1.4895. The loonie is seen finding
support around the 1.52 area.
Survey results from Ifo Institute showed that Germany's business
confidence improved in October.
The business confidence index rose unexpectedly to 116.7 from
revised 115.3 in the previous month. The expected reading was
115.0.
After climbing to near a 2-week peak of 0.9752 against the
aussie soon after the decision, the loonie reversed direction and
fell to 0.9839. The loonie is poised to challenge support around
the 1.00 region.
Data from the Australian Bureau of Statistics showed that
Australia's consumer prices rose 0.6 percent on quarter in the
third quarter of 2017.
That was shy of expectations for a gain of 0.8 percent but was
up from 0.2 percent in the three months prior.
The loonie weakened to an 8-day low of 89.21 against the yen,
reversing from a recent high of 90.09. On the downside, 88.00 is
likely seen as the next support for the loonie.
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