Skip to main content

The Globe and Mail

Loonie falls, traders look ahead to rate announcement

The Royal Canadian Mint unveiled the 2012 lucky loonie coin in Calgary, Alta., Thursday, July 19, 2012.


The Canadian dollar fell to its lowest level since late August on Friday amid drops in commodity prices, while traders looked to next week's Bank of Canada decision on interest rates.

The loonie was down 0.76 of a cent (U.S.) to 100.77 cents.

The bank is widely expected to leave its key interest rate at one per cent Tuesday. But traders will be interested in what the bank will have to say about when it might start upping rates.

Story continues below advertisement

"Speculation has risen than the statement will omit the reference that 'some modest withdrawal of the present considerable monetary policy stimulus may become appropriate', which would shift the bank from hawkish to neutral and weigh on the dollar," said Scotia Capital chief currency strategist Camilla Sutton.

Metal prices particularly weighed on the commodity-sensitive currency as December copper lost nine cents (U.S.) to $3.66 a pound while December bullion backed off $19.40 (U.S.) to $1,725.30 an ounce.

The November contract on the New York Mercantile Exchange lost early gains and moved down 52 cents (U.S.) to $91.58 a barrel.

Traders also took in data showing that the inflation rate came in at an annualized rate of 1.2 per cent, which was in line with expectations.

Markets were unimpressed with an agreement early Friday by the leaders of the 17 euro countries to push ahead with a single banking supervisory body. The leaders remained vague on key details, such as when the supervisor will be up and running.

Some investors and analysts worry that Europe's politicians may have lost the incentive to fix things quickly now that market turmoil has subsided. The borrowing costs of countries like Spain have eased since the European Central Bank unveiled in September a new bond-buying program.

Report an error

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at