TORONTO – The Canadian dollar closed lower Monday at the start of a key week for the currency.
The loonie shed 0.06 of a cent to 88.62 cents US amid gains in Canadian wholesale sales in August.
Statistics Canada said those sales edged up 0.2 per cent to $53.1 billion. The agency said that gains in three subsectors, in particular the machinery, equipment and supplies subsector, more than offset declines elsewhere.
Excluding the motor vehicle and parts subsector, which recorded the largest decline, wholesale sales rose one per cent.
The Bank of Canada delivers its next interest rate statement on Wednesday along with a monetary policy report containing its latest estimates for growth and inflation.
The central bank is expected to leave its key rate unchanged at one per cent, where it has been for over four years. However, traders will focus on the morning news conference by Bank of Canada governor Stephen Poloz.
Also on Wednesday, Statistics Canada delivers the August read on retail sales.
Financial markets were calm Monday following a volatile week amid worries about the state of the global economy.
The volatility has emerged ahead of the end of the U.S. Federal Reserve’s key stimulus program, which is slated for windup at the end of this month. The program has involved the purchase of hundreds of billions of dollars of bonds, an exercise that kept long-term rates low and encouraged the huge rally on stock markets over the last few years.
Investors are also looking for the European Central Bank to do more to reduce deflationary pressures and encourage growth.
Markets will focus on China this week for reassurance that the world’s second-biggest economy can deliver strong growth. However, analysts’ expectations for growth have narrowed over the last few months.
The consensus calls for China’s third-quarter gross domestic product to fall to 7.2 per cent, which would be a five-year low.
The resource-sensitive loonie was off morning highs as early gains in oil prices evaporated and the November crude oil contract declined four cents to US$82.71 a barrel. Demand concerns and rising supplies have sent oil down 14 per cent over the last month.
The December copper contract was two cents lower at US$2.99 a pound while the December gold contract gained $5.70 to US$1,244.70 an ounce.