BUSINESS

Loonie little changed amid minor rise in inflation during September

10/18/2013 09:03 EDT | Updated 01/23/2014 06:58 EST
TORONTO - The Canadian dollar closed flat Friday as inflation pressures increased slightly in September.

The loonie slipped 0.01 of a cent to 97.14 cents US as Statistics Canada said the Consumer Price Index rose by 0.2 per cent. That was on top of a 0.1 per cent rise in August.

The agency says the CPI rose 1.1 per cent in the 12 months to September, which matched the rate in August.

Statistics Canada says higher shelter costs led the rise in the CPI, while year-over-year price increases for food and transportation were also contributing factors.

"Today's inflation reading is consistent with the broad trend of soft price pressures in the past several months and is roughly consistent with the Bank of Canada's expectations for inflation this quarter," said CIBC World Markets economist Emanuella Enenajor.

The inflation data came out ahead of the next interest rate announcement on Wednesday from the Bank of Canada.

Economists generally don't expect the bank to raise its key overnight rate from one per cent until well into 2014.

Meanwhile, there was positive news from the world's second-biggest economy as China’s growth rebounded in the latest quarter to 7.8 per cent from a two-decade low of 7.5 per cent in the second quarter, helped by government stimulus measures.

Copper prices had advanced in the wake of the data from China, the world's biggest consumer of the metal. But the December contract on the New York Mercantile Exchange ended the session flat at US$US$3.30 a pound.

Oil also advanced with the November contract in New York 14 cents higher at US$100.81 a barrel.

December gold bullion lost $8.46 to US$1,314.60 an ounce after running ahead more than $40 on Thursday.