BUSINESS

Canadian dollar treks higher as key commodities lift, inflation steady

03/20/2015 09:42 EDT | Updated 05/20/2015 05:59 EDT
TORONTO - The Canadian dollar got a boost Friday on higher commodities prices while the latest figures on inflation held steady.

The loonie finished up 0.92 of a U.S. cent to 79.50 cents after Statistics Canada reported February inflation data showed lower gas prices offset higher prices for nearly everything else.

The federal agency said the consumer price index rose 1.0 per cent in February compared with a year earlier, mostly as a result of lower fuel prices. Gasoline prices were 21.8 per cent lower in February compared with the previous year, while fuel oil tumbled 23.4 per cent, the report said.

Statistics Canada also reported that retail sales fell for the second consecutive month in January, dropping 1.7 per cent to $41.4 billion. Excluding sales at gasoline stations, retail sales were down 0.8 per cent.

"Canadian inflation figures look weak, largely because of depressed oil prices, but the Bank of Canada is keen to stress the economy won't see deflation," said Dennis de Jong, managing director at UFX.com in a note.

"However, the pressure is now firmly on the board to consider readjusting its neutral policy with sluggish retail sales also of concern."

In commodities, the April crude contract in New York, which expired on Friday, rose $1.76 to US$45.72 a barrel.

Metals were higher with the April gold bullion contract ahead $15.60 to US$1,184.60 an ounce and the May copper contract soaring 10.1 cents to US$2.76 a pound.

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