Canadian dollar and business outlook

By Phil Franz-Warkentin

Glacier FarmMedia MarketsFarm – The Canadian dollar was showing some strength relative to its United States counterpart Tuesday morning as currency traders reacted to updated inflation data.

At 8:51 a.m. CST Tuesday morning the Canadian dollar was trading at US$0.7501 or US$1=C$1.3332, which compares with Monday’s close of US$0.7470 or US$1=C$1.3387.

Canada’s rate of inflation held steady at 3.1 per cent in November, according to a report from Statistics Canada. The consumer price index was up by 0.3 per cent in November on seasonally adjusted monthly basis.

Average pre-report expectations had been for a slight decline in the rate of inflation, with the steady reading seen underpinning ideas that the Bank of Canada will not be cutting interest rates anytime soon.

Canada’s Industrial Product Price Index was down by 0.4 per cent in November and 2.3 per cent lower on an annual basis. Meanwhile, the Raw Materials Price Index decreased by 4.2 per cent monthly and was down by 4.6 per cent over the year.

Crude oil was stronger Tuesday morning, with West Texas Intermediate crude oil up by 0.90 per cent at US$73.12 per barrel.

The TSX was firmer, gaining 152.61 points at 8:51 CST, trading at 20,775.32 points.