Newspaper article The Canadian Press

Loonie Closes at 2-Month Low amid Falling Commodities,ahead of Rate Announcement

Newspaper article The Canadian Press

Loonie Closes at 2-Month Low amid Falling Commodities,ahead of Rate Announcement

Article excerpt

Loonie down amid falling commodities

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TORONTO - The Canadian dollar closed at its lowest level since mid-August on Friday amid sharp drops in commodity prices, while traders looked to next week's Bank of Canada decision on interest rates.

The loonie was down 0.85 of a cent to 100.68 cents US as data showed that the central bank doesn't need to raise rates in response to higher inflation. The inflation rate for September came in at an annualized rate of 1.2 per cent, which was in line with expectations.

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.

"Speculation has risen that 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. …

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