Canadian dollar edges higher
The Canadian dollar was higher Monday morning amid pressure on emerging markets' currencies.
The loonie rose 0.27 of a cent to 90.58 cents US, recovering some of last week's slide of 0.8 of a cent.
Traders looked to an interest rate announcement Wednesday by the U.S. Federal Reserve to see if the central bank will launch another round of cuts to its massive monthly bond purchases.
The Fed started reducing its bond purchases this month by US$10 billion to $75 billion and analysts expect the U.S. central bank to further cut its purchases by another $10 billion a month.
The quantitative easing had flooded emerging markets with cheap money, but now those funds are drying up and putting severe pressure on several emerging market currencies. The worry is the problems in countries such as Turkey, Argentina and South Africa could spread to other markets.
The Turkish lira hit a record low of 2.39 per U.S. dollar on Monday before recovering to 2.32 per dollar after the central bank said it would hold an emergency policy meeting on Tuesday. Analysts say a rate hike is likely.
The South African rand fell another 0.3 per cent to 11.13 per dollar, and Russiaâ€™s ruble fell 0.5 per cent to 34.68 per dollar.
Investors were particularly focused on China last week after a widely watched indicator showed the manufacturing sector of the world's number-two economy unexpectedly slipped into contraction during January.
Meanwhile, investors will also digest the latest growth figures from Canada and the U.S. during the week.
Economists expect Statistics Canada to report Friday that gross domestic product grew by 0.2 per cent in November amid rising manufacturing sales. That would be a slight dip from 0.3 per cent GDP growth in October.
Winter weather is expected to have taken a toll on December GDP growth, but CIBC senior economist Peter Buchanan said that "a 0.2 per cent rise in November, and comparable decline in the final month of the year, would leave fourth-quarter growth headed for a 2.7 per cent annualized increase."
In the U.S., it is expected that data Thursday will show fourth-quarter economic growth came in at an annualized pace of 3.2 per cent, following a 4.1 per cent rise in the previous quarter.
On the commodity markets, the March crude oil contract on the New York Mercantile Exchange was 20 cents higher to US$96.84 a barrel.
The February gold bullion contract was down $4.30 to US$1,259.90 an ounce while the March copper contract was unchanged at US$3.27 a pound.
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