TORONTO - The Canadian dollar sold off for a third day on Friday amid data showing tame inflation and changing expectations for the timing of the next interest rate hike by the Bank of Canada.
The currency was 0.31 of a cent lower to 99.4 cents US as Statistics Canada said that Canada’s annual inflation rate was 0.8 per cent in December, the same as in November.
On a month-to-month basis, consumer prices dipped 0.6 per cent from November, more than economists expected. Prices on a number of key items fell in December from the previous month, including gasoline, automobiles and clothing.
The dollar has been under pressure since the Bank of Canada indicated Wednesday that interest rates will likely rise further down the road than had been expected because of economic weakness. It closed below parity with the greenback Thursday for the first time in over two months.
Recent optimism about improving economies in the U.S. and China continued to help support an upswing in oil prices. The U.S. housing and jobs markets have shown improvement, while China’s manufacturing output has been gaining steam.
The March crude contract on the New York Mercantile Exchange gained 38 cents to US$96.33 a barrel.
February bullion on the Nymex declined $6.10 to US$1,663.80 an ounce while March copper was unchanged at US$3.68 a pound.