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Canadian dollar rises, data shows inflation remained weak in December

Loonies are pictured in Vancouver, Sept. 22, 2011. THE CANADIAN PRESS/Jonathan Hayward
January 24, 2014 - 6:01 AM

TORONTO - The Canadian dollar was higher Friday as data showed price pressures continue to be weak.

The loonie was up 0.22 of a cent to 90.32 cents US as Statistics Canada said the consumer price index for December increased to 1.2 per cent on an annual basis compared with 0.9 per cent in November, largely because of higher gasoline prices.

The currency has had another tough week, down about a cent after the Bank of Canada left its key interest rate unchanged Wednesday and noted that inflation has been lower than expected and won't return to its ideal target of two per cent until 2016.

The loonie was also hit by negative news from the world's second biggest economy as data showed China's manufacturing sector unexpectedly moved into contraction territory during January.

HSBC’s purchasing managers’ index for China dipped this month to 49.6, the lowest level since July. Numbers below 50 indicate contraction.

On the commodity markets, the March crude contract on the New York Mercantile Exchange lost 27 cents to US$97.05 a barrel.

February gold gained $3.90 to US$1,266.20 an ounce while March copper edged up a cent to US$3.29 a pound.

News from © The Canadian Press, 2014
The Canadian Press

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