Monday, March 2nd5.5°C
25405
24949

Loonie up ahead of budget, Fed chair signals continued stimulus withdrawal

TORONTO - The Canadian dollar closed higher Tuesday while traders looked ahead to the release of the federal government's new budget.

The loonie was ahead 0.31 of a cent to 90.77 cents US as the U.S. dollar backed off amid the other major market event of the day — congressional testimony by the new chair of the Federal Reserve.

The dollar closed for the day before Finance Minister Jim Flaherty presented the budget to the Commons shortly after the market close.

The Conservative government’s march toward balanced budgets includes an estimated $7.4 billion in savings over six years from cutting public-service compensation.

By comparison, the budget estimates only $1.8 billion in savings from various other measures.

At the core of the compensation plan proposal is a change to the health benefits available to retired bureaucrats.

Meanwhile, Fed chairwoman Janet Yellen said that she expects a "great deal of continuity" with her predecessor, Ben Bernanke.

Yellen signalled that she supports his view that the economy is strengthening enough to withstand a pullback in stimulus but that rates should stay low to fuel further growth.

So far, the Fed has moved twice over the last two months to cut its bond buying program by a total of US$20 billion to $65 billion and analysts generally expect the Fed to continue cutting by $10 billion every meeting.

Yellen’s remarks to the House financial services committee had been highly anticipated, particularly with last week's U.S. employment data for January falling well short of expectations and fresh worries about how emerging markets are dealing with Fed tapering.

Traders are also braced for what could be some further negative news from China after data last week showed the manufacturing sector in the world's second-biggest economy still expanding, but at a slower pace.

Meagre trade growth is expected when import and export data is released Wednesday. Inflation data comes out the next day and Barclays Research said it expects inflation to moderate to 2.3 per cent year over year in January from 2.5 per cent in December, thanks in large part to lower food inflation.

On the commodity markets, March crude on the New York Mercantile Exchange edged 12 cents lower to US$99.94 a barrel.

March copper was down a cent to US$3.21 a pound while April gold bullion moved ahead $15.10 to US$1,289.80 an ounce.

The Canadian Press


Read more Business News

25194


Recent Trending




Today's Market
S&P TSX15264.05+29.71
S&P CDNX704.30-2.43
DJIA18288.63+155.93
Nasdaq5008.096+44.568
S&P 5002117.39+12.89
CDN Dollar0.7975-0.0021
Gold1206.40-6.20
Oil51.59-0.55
Lumber298.40+1.20
Natural Gas2.699-0.035

 
Okanagan Companies
Pacific Safety0.135+0.015
Knighthawk0.010.00
QHR Technologies Inc1.60+0.05
Cantex0.035-0.005
Anavex Life Sciences0.18-0.01
Metalex Ventures0.045+0.01
Russel Metals25.54+0.16
Copper Mountain Mining1.29-0.01
Colorado Resources0.135-0.015
ReliaBrand Inc0.008-0.0007
Sunrise Resources Ltd0.045-0.005
Mission Ready Services0.225-0.01

 



24696

FEATURED Property
2200291478 Clifton Road
4 bedrooms 3 baths
$498,800
more details
image2image2image2
Click here to feature your property
Please wait... loading


Refinance your mortgage?

Canadian Mortgage rates are low and could be dropping down in time for the spring market following a drop in the Bank of Canada Rate on January 21 by 1/4% which will save new buyers and those with mo...


Creating your retirement vision

A vision means different things to different people. To the head of a large corporation, it’s the ability to chart a course that will deliver success (think Steve Jobs and Apple), to a shaman, i...


Are you asking the right questions?

Have you ever had this happen to you? You are in the middle of your second or third good discussion with a prospect and everything seems to be going great. The prospect seems engaged and happy to work...

_








Member of BC Press Council


25107