The Canadian dollar pulled back more than half a U.S. cent Friday after Statistics Canada reported the country’s inflation rate fell to its lowest level in more than three years.The loonie moved down 0.61 of a cent to $1.0066 (U.S.).
Statistics Canada said the annual inflation rate dropped to 0.8 per cent in November, affected primarily by lower gasoline prices and discounting by car dealers to attract sales. Economists had expected the inflation rate to fall to 1 per cent, a drop of two-tenths of a percentage point from the rate in October.
The agency also reported Canada’s gross domestic product grew 0.1 per cent in October.
The Conference Board of Canada said Friday that its index of consumer confidence was down again in December, the third month in a row, dropping by 2.4 points from the previous month to 77.9. The index is based a monthly survey of consumer attitudes about a number of personal and general financial issues.
Meanwhile, the U.S. continues to grapple with the uncertainty of the “fiscal cliff” negotiations.
Republican leaders postponed a vote on legislation that would raise taxes on wealthier Americans.
House Speaker John Boehner conceded late Thursday that there were not enough votes from Republican lawmakers for his plan that would have allowed higher tax rates for those making $1-million and above.
Many Republicans don’t want higher taxes at all.
Congress will reconvene on Thursday after the Christmas holiday.
A deal must be reached by the end of this year to avoid going over the “fiscal cliff,” shorthand for measures that would impose of hundreds of billions of dollars in spending cuts and tax increases. Economists warn this could plunge the world’s largest economy back into recession and depress economies around the world.
In commodities, the January crude contract on the New York Mercantile Exchange slid $1.47 to close at $88.66 a barrel.
March copper was up 3.1 cents at $3.57 a pound. February bullion added $14.20 to $1,660.10 an ounce.