The Canadian dollar closed lower Wednesday amid declining metal prices and reassurance from the U.S. Federal Reserve about when it might raise rates.
The loonie ended down off 0.13 of a cent at to 91.62 cents (U.S.).
Minutes of the U.S. Federal Reserve’s late April meeting showed that officials discussed how to eventually tighten monetary policy and move rates away from near zero, where they’ve been since the financial crisis of 2008.
The minutes disclosed that a number of Fed officials said it would be important for the U.S. central bank to “communicate still more clearly about the Fed’s policy intentions as the time of the first increase in the federal funds rate moves closer.”
Fed chair Janet Yellen noted earlier this month that the U.S. job market remains “far from satisfactory” and inflation below the Fed’s target rate. Yellen said she expects low borrowing rates will continue to be needed for a “considerable time.”
On the commodity markets, July crude in New York gained $1.74 to $104.07 a barrel.
July copper dipped 2 cents to $3.12 a pound, while June gold faded $6.50 to $1,288.10 an ounce.
The economic calendar was light Wednesday, but markets are looking ahead to two major economic reports this week.
The March reading on retail sales comes out Thursday and economists are looking for a rise of 0.3 per cent.
On Friday, markets will look to the latest inflation data and, in turn, what effect the reading could have on the Bank of Canada’s interest rate announcement in early June.
“Friday’s inflation print will be a core input for judging [Bank of Canada] policy going forward,” observed Camilla Sutton, chief foreign exchange strategist at Bank of Nova Scotia.
“Currently the market is pricing in no chance of an interest rate cut or hike in the next 12-months.”
Economists expect the inflation data will show that the consumer price index rose 2 per cent year over year in April, up from the 1.5 per cent reading registered in March.Report Typo/Error