The Canadian dollar advanced significantly on the U.S. dollar today on rising oil prices and a very positive consumer price index report.
The loonie continued to push higher today as oil topped US$130 a barrel. Yesterday U.S. legislators overwhelmingly approved antitrust legislation that would allow the federal government the right to sue the Organization of Petroleum Exporting Countries (OPEC) over price fixing by limiting oil production. This development did little to temper the sky-high price of oil as it is expected that U.S. president George Bush will veto the legislation.
According to Statistics Canada, Canada's consumer prices accelerated for the first time in five months in April in the wake of higher gasoline prices and fewer incentives on passenger vehicles. The consumer price index rose 1.7 per cent between April 2007 and April 2008, up from the 1.4-per-cent increase in March. Today's news rocked the markets as investors placed bets that the Bank of Canada will limit future rate cuts.
By 12:45 p.m. Wednesday the Canadian dollar was trading at 1.0161 against the U.S. dollar.
Market report prepared by Bruce Hauser
Accu-Rate Corp.
2573 Carling Ave. Ottawa, ON K2B 7H7
Tel: (613) 596-5505
E-mail: bruce@accu-rate.ca
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