Canadian Dollar Rises, Lifted by Commodity Prices

July 19, 2013

By David George-Cosh

TORONTO—The Canadian dollar moved higher Friday, receiving a slight boost from an increase in commodity prices and shrugging off another tame inflation report in Canada.

The U.S. dollar was at C$1.0364 Friday, from C$1.0378 late Thursday, according to data provider CQG.

The U.S. dollar moved sideways against its Canadian counterpart after news that Canada’s core inflation rose by 1.3% on a year-over-year basis in June, well below the Bank of Canada’s medium-term target of 2%, while the headline index rose by 1.2%.

Economists expected core inflation for June to come in at 1.3%, while the headline rate was expected to be 1.2%, according to Royal Bank of Canada RY.T -1.12% .

“Inflation numbers today reinforced the dovish slant the Bank of Canada had during its rate announcement,” said Scott Smith, senior corporate FX trader for Cambridge Mercantile in Calgary.

Mr. Smith said the Canadian dollar received decent buying interest in the session on the back of rising oil prices, which has benefited the loonie compared with other commodity-based currencies like the Australian dollar.

Light, sweet crude for August on the New York Mercantile Exchange settled just two cents below Brent crude Friday. It was the closest that the two contracts have traded in nearly three years.