Loonie slightly lower as Korean free trade pact inked, oil and copper drop
TORONTO - The Canadian dollar closed little changed Tuesday as Canada and South Korea signed a free-trade agreement after a decade of talks while the U.S. greenback lost ground against most other major currencies during the session.
The commodity-sensitive loonie inched 0.01 of a cent lower to 90.07 cents US amid falling oil and copper prices.
Prime Minister Stephen Harper is calling the pact with South Korea a major boost for Canadian exporters looking to establish themselves in the Asian market.
Once enforced, it will eliminate virtually all tariffs between the countries, with Korea cutting 81.9 per cent of all duties on the first day the deal comes into effect, and Canada removing 76.4 per cent of levies.
Some tariffs, particularly in agriculture, will take more than a dozen years be fully phased out.
Meanwhile, oil and copper continued to lose ground amid concerns about Chinese growth as data released over the weekend showed that exports of the world's second-biggest economy fell by an unexpectedly large 18 per cent in February. The country's official 2014 economic growth target of 7.5 per cent assumes trade also will grow by 7.5 per cent.
Copper prices headed lower for a third day as a result of the data, with the metal widely viewed as a proxy for the global economy sitting at a multi-year low. On Tuesday, the May copper contract on the New York Mercantile Exchange was down another eight cents at US$2.95 a pound, its lowest close since June 2010, after shedding six per cent over the previous two sessions.
Oil prices also suffered from the Chinese data and on Tuesday the April crude contract on the New York Mercantile Exchange was down a further $1.09 to US$100.03 a barrel.
Gold prices were on the upswing with April bullion ahead $5.20 to US$1,346.70 an ounce.
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