Canadian dollar loses steam before Bank of Canada’s business outlook survey

TORONTO – The loonie pulled back early Monday ahead of a Bank of Canada survey that will offer further insight into business expectations.

The Canadian dollar was down 0.18 of a cent to 90.89 cent cents US On Friday it rose to its highest close since mid-February after the latest Canadian employment data beat expectations.

Further insight into the domestic economy will come when the Bank of Canada releases its first-quarter business outlook survey mid-morning, which is expected to show that winter storms hurt growth during the first three months of the year.

“The key components of the report will be the balance of opinion on inflation expectations, and proxy measures of economic slack,” wrote RBC Dominion Securities chief technical analyst George Davis in a note.

“Indications of firmer underlying inflationary pressures — mostly via regulated price increases, and a weaker currency — suggest elevated importance on this measure, which is a sentiment likely echoed in Ottawa ahead of the monetary policy report in two weeks time.”

Last week, Canadian jobs figures for March impressed as the unemployment rate pulled back one-tenth of a point to 6.9 per cent.

Several other reports on economies around the world later this week will bring to light how the global outlook is shaping up.

On Tuesday, a policy statement from the Bank of Japan could provide direction on whether the central bank will inject further stimulus, while on Wednesday the U.S. Federal Reserve minutes are released.

In commodities, the May crude contract dropped 63 cents to US$100.51 a barrel.

June bullion was down US$4.10 to US$1,299.40 an ounce, while May copper climbed nearly a cent at US$3.03 a pound.