Loonie at four-month high amid strong housing data; traders look to jobs report
TORONTO - The Canadian dollar closed at a four-month high Thursday while traders digested a stronger than expected reading on the housing sector and awaited the release of the April employment report Friday morning.
The currency gained 0.61 of a cent to 92.4 cents US as Canada Mortgage and Housing Corp. reported that housing starts came in at an annualized rate of 195,000 in April, higher than the 175,000 that economists had expected.
Meanwhile, Statistics Canada is expected to report the economy created about 16,000 jobs last month.
Other data showed that the number of Americans seeking unemployment benefits fell 26,000 last week to 319,000, the latest sign that the job market is slowly improving.
Applications, a proxy for layoffs, are returning to pre-recession levels. The average for April was 312,000, the fewest since October 2007.
Investors were also encouraged Thursday by Chinaâ€™s April trade data that showed an improvement in exports. Exports rose 0.9 per cent from the previous year, compared with a 6.6 per cent decline in March. Imports also grew after a contraction in March but at a subdued level.
Tensions arising from the Ukraine crisis eased a bit after Russian President Vladimir Putin softened his tone. Putin endorsed plans for fresh elections in Ukraine following the ouster earlier this year of its pro-Russian leader and called on pro-Russian militants in eastern Ukraine to delay referendums on autonomy.
Elsewhere, the European Central Bank has left its benchmark interest rate unchanged at a record low of 0.25 per cent amid growing signs that the economic recovery in the 18-country eurozone is gaining momentum.
A rate cut could give growth a small boost in theory by lowering borrowing costs for banks and companies. It could also help lower the euro, which is near a 2 1/2-year high against the U.S. dollar at around $1.395. A weaker euro would help exporters and boost inflation, which at an annual 0.7 per cent is well under the bankâ€™s two per cent goal.
On the commodity markets, July copper in New York edged up three cents to US$3.06 a pound, June bullion was down $1.20 to US$1,287.70 an ounce while June crude was 51 cents lower to US$100.26 a barrel.
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