Canadian dollar and business outlook

By Phil Franz-Warkentin

Glacier FarmMedia MarketsFarm – The Canadian dollar was slightly softer Tuesday morning, as currency traders continued to adjust positions ahead of the latest interest rate announcement from the United States Federal Reserve later in the week.

At 8:43 a.m. CDT the Canadian dollar was trading at US$0.7253 or US$1=C$1.3787, which compares with Monday’s close of US$0.7265 or US$1=C$1.3765.

The total value of building permits issued in Canada was up by 20.5 per cent in April compared to the previous month, hitting C$12.8 billion, according to a report from Statistics Canada.

Economists generally expect the Fed will leave rates unchanged on Wednesday, diverging from the Bank of Canada and the European Central Bank that both lowered rates last week. However, the Fed is still expected to cut rates later in the year, and the accompanying statement will be followed closely. U.S. inflation data will also be released Wednesday.

Crude oil was softer in early activity, with West Texas Intermediate crude oil down by 0.15 per cent at US$77.62 per barrel.

The TSX was weaker, losing 171.12 points at 8:43 CDT to trade at 21,898.64 points.