By Commodity News Service Canada
Winnipeg, July 22 – The Canadian dollar was lower on Tuesday as U.S. inflation figures for June came in as expected, analysts say.
AT 9:16 CDT Tuesday morning, the loonie was at US$0.9307 or US$1 = C$1.0737, up 0.13 of a cent from Monday’s close. This was off early lows as the U.S. consumer price index matched economists’ expectations by rising 0.3 per cent during June, according to the U.S. Labour Department.
Analysts note that readings on U.S. inflation are considered key these days to get a clue to when the Federal Reserve might start hiking rates since the American employment situation has improved so much over the last few months.
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Traders were also speculating that a higher than expected inflation reading would have pulled forward expectations for when the U.S. Federal Reserve will start raising rates. Many analysts expect that the Bank of Canada could also begin hiking rates next summer.
Meanwhile, geopolitical concerns eased slightly as traders considered the impact of potentially tighter economic sanctions against Russia for its support of Ukrainian rebel militias blamed for shooting down the Malaysian airliner last week.
There was also relief as pro-Moscow separatists released a train packed with bodies and handed over the aircraft’s black boxes.
On the commodity markets, the September crude oil contracts rose to US$103.12, while August gold bullion declined to US$1,304.20 an ounce. September copper rose two cents to US#3.22 a pound.
The TSX rose 46.17 points to sit at 15,296.16 at 9:16 CDT Tuesday morning.
