TORONTO _ The Canadian dollar was lower Wednesday as traders considered data showing a worse than expected reading on retail sales in August and looked ahead to the mid-morning announcement on interest rates by the Bank of Canada.
The loonie declined 0.17 of a cent to 88.89 cents US as Statistics Canada reported retail sales fell 0.3 per cent overall during August. Economists had expected a flat reading.
The central bank is universally expected to leave its key rate at one per cent, where it has stood since September 2010 as the global economy continues to recover from the 2009 financial collapse and subsequent recession. The bank also releases its latest Monetary Policy Report containing its latest assessments on economic growth and inflation.
Analysts say the MPR will likely reflect increasing worries about global economic performance, the same concerns that helped trigger a major retracement on equity markets over the last month.
``The central bank has been highlighting such risks for most of this year, so we see few reasons for a departure, despite the still resilient readings from U.S. activity indicators,'' said Mark Chandler, head of Canadian FIC Strategy at RBC Dominion Securities.
He added that one aspect that bears watching is how the Bank of Canada responds to falling oil prices and the impact on Canada's trade performance. Oil prices have tumbled over 12 per cent in the last month alone amid lower demand prospects for rising supplies.
Commodity prices were generally higher with the December crude contract in new York ahead 38 cents to U$82.87 a barrel while December copper added a penny to US$3.04 a pound.
December bullion faded $3 to US$1,248.50 an ounce.