Canadian dollar falls amid weaker-than-expected inflation figures

TORONTO – The Canadian dollar was lower Friday as Statistics Canada reported that consumer prices rose last month at the slowest rate since October 2009.

The loonie fell a penny to 97.12 cents US.

The federal agency says the annual inflation rate dipped six-tenths of a point to 0.4 per cent, below what economists had been expecting.

There was also an outward decline month-to-month, with prices dropping 0.4 per cent from March. The biggest contributor to the decline was gasoline, which fell six per cent from last April.

On a month-to-month basis, gasoline, clothing, restaurant meals, furniture and mortgage interest costs were all lower last month than they were in March.

But the Bank of Canada’s core inflation index, which excludes volatile items such as gasoline, just managed to stay within the central bank’s desired one-to-three range, falling only three-tenths of a point to 1.1 per cent.

Meanwhile, gold prices continued to pull back. June gold bullion dropped $8.10 to US$1,378.80 an ounce, down nearly five per cent this week. On Wednesday, it closed under $1,400 an ounce for the first time in a month.

The June crude contract was up 65 cents to US$95.81 a barrel and July copper climbed four cents to US$3.33 a pound.

Overseas markets were subdued after the European Union statistics office reported that nine of the 17 countries that use the euro are in recession, including France. The combined economy of the 17 countries shrank by 0.2 per cent in the first three months of 2013 compared to the prior quarter.