Canada’s dollar weakened versus its U.S. counterpart on concern the global recovery is slowing after China reported its biggest trade deficit in more than two decades, sapping demand for higher-risk assets.
Canada’s dollar staged its biggest five-day rally since October after central banks including the Bank of Canada took steps this week to make it cheaper for lenders to borrow dollars during emergencies.
Canada’s consumer prices advanced less than forecast in November as cost increases for energy and food moderated, giving the Bank of Canada scope to hold interest rates steady until the second quarter of next year.
Canada’s dollar dropped to the lowest level in almost three weeks as concern Italy may become the latest European nation in need of a financial bailout drove investors to the safety of the U.S. currrency.
Canada’s economy added the most jobs in eight months in September, led by hiring at schools, bringing the country’s jobless rate to its lowest since 2008 and adding to evidence the country is averting a new recession.
Bank of Canada Governor Mark Carney may damp investor expectations he will raise his policy interest rate in June during parliamentary testimony today, through a change in language from last week’s interest rate announcement.