Loonie higher Bank of Canada leaves key interest rate unchanged at one

Loonie higher, Bank of Canada leaves key interest rate unchanged at one per cent TORONTO – The Canadian dollar closed higher Wednesday as the Bank of Canada left its key interest rate unchanged at one per cent.The loonie was ahead 0.34 of a cent to 95.31 cents US as the American currency weakened during the morning and traders looked ahead to the European Central Bank meeting Thursday and U.S. jobs data Friday.The Bank of Canada key rate has been at the one per cent level since September 2010, reflecting a tepid global economic recovery from the 2008 crash.The language in the announcement did nothing to dispel sentiment that the central bank likely won’t move on rates until well into 2014 at the earliest. It observed that the “dynamic” of the global economy has moderated.Earlier, data showed Canada’s trade deficit with the rest of the world worsened more than expected in July. Statistics Canada reported that the deficit widened from $460 million in June to $931 million in July. Economists had expected the deficit to come in at $400 million.Statistics Canada said that merchandise imports grew 0.6 per cent in July while exports declined 0.6 per cent.It said that “lower exports of aircraft as well as unwrought precious metals and precious metal alloys were the main contributors to the decline.”Traders also took in some positive data on the health of the U.S. economy during August.The Federal Reserve said in its latest regional survey that the that the economy expanded at a modest to moderate pace in August.The Fed said in its so-called Beige Book that manufacturing expanded modestly, lending activity weakened somewhat while hiring held steady or increased modestly.Traders are anxious to see if the Fed decides later this month to start scaling back its monthly US$85 billion of bond purchases.Commodity prices headed lower with October crude on the New York Mercantile Exchange down $1.31 to US$107.23 a barrel.December copper fell six cents to US$3.25 a pound, giving back a big chunk of Tuesday’s seven-cent gain, following strong manufacturing data from China and the U.S.Gold prices also moved lower as the December contract lost $22 to US$1,390 an ounce. AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email by Malcolm Morrison, The Canadian Press Posted Sep 4, 2013 8:56 am MDT

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