BUSINESS

Canadian dollar flat amid rising commodities, weak inflation reading

04/19/2013 08:53 EDT | Updated 06/19/2013 05:12 EDT
TORONTO - The Canadian dollar closed little changed Friday amid rising commodity prices and data showing inflation pressures remain weak.

The loonie was off 0.03 of a cent to 97.44 cents U.S. as Statistics Canada reported that the consumer price index rose one per cent in March compared with a year earlier, down from a 1.2 per cent rise in February.

Economists had expected a reading of 1.1 per cent.

The slower increase in the CPI was mainly the result of gasoline prices, which fell 0.3 per cent on a year-over-year basis in March, after rising 3.9 per cent in February.

The soft inflation data further cemented the view that rate hikes by the Bank of Canada are a long ways off.

"Today's figures are consistent with the Bank of Canada's updated view of more restrained inflationary pressures ahead, confirming the central bank’s scope to keep policy stimulative for the foreseeable future," said CIBC World Markets economist Emanuella Enenajor.

Commodity prices were mixed Friday at the end of a punishing week when prices for oil and metals tumbled amid new worries about the pace of the global economic recovery.

Markets got off to a weak start Monday amid data showing growth in China coming in lower than expected. Losses picked up mid-week after the International Monetary Fund downgraded its estimates for global growth.

Additionally, worries that the worst-hit countries of the eurozone debt crisis might use their gold reserves to deal with their problems helped sent bullion prices to their lowest levels in more than two years.

June bullion gained $3.10 to US$1,395.60 an ounce. But copper remained stuck at 18-month lows, with the May contract down six cents at US$3.15 a pound.

The May crude contract on the New York Mercantile Exchange was up 28 cents to US$88.01 a barrel.