By Commodity News Service Canada
Winnipeg, August 19 – The Canadian dollar was lower on Tuesday amid data showing weak inflation in the United States, analysts say.
At 9:17 CDT Tuesday morning the loonie was down 0.22 of a cent to US$0.9164 or US$1 = C$1.0889, as U.S. consumer prices for July rose at the slowest pace in five months, held back by a drop in gasoline prices.
Consumer prices met expectations as they edged up a seasonally adjusted 0.1 per cent last month, according to the U.S. Labour Department.
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Consumer inflation has been up two per cent over the past year, meeting a target set by the Federal Reserve. Inflation, excluding food and energy, is up 1.9 per cent in the past 12 months.
The latest read on inflation came ahead of the release of the minutes from the latest Fed interest rate meeting Wednesday. On Friday the chairwoman of the Federal Reserve, Janet Yellen, will deliver the keynote address at the central bank’s annual meeting in Jackson Hole, Wyoming.
There was also further indication of a rebound in the U.S. housing sector as home construction jumped 15.7 per cent in July to an annualized rate of 1.09 million. This is the fastest pace in eight months.
Easing geopolitical tensions provided some support for the markets on Tuesday, traders say. Foreign affairs ministers from both Ukraine and Russia had meetings in Berlin over the weekend and reportedly some progress is being made. However, there is still no decision on establishing a cease-fire between the Ukraine government and pro-Russian rebels.
At 9:17 CDT Tuesday morning, the TSX rose 76.26 points to sit at 15,414.73.
