Saturday, January 31st-1.7°C
24624

Loonie closes up ahead of jobs data, rate cut from European Central Bank

TORONTO - The Canadian dollar closed higher Thursday as the European Central bank moved to spark a tepid economic recovery in the eurozone and traders looked ahead to the release of employment data.

The loonie was ahead 0.08 of a cent to 91.5 cents US as traders also focused on Friday's release of Canadian employment data for May. Economists expect about 21,000 jobs were created last month after the economy shed 29,000 the previous month.

On Thursday, the ECB announced it was cutting its lending rate to 0.15 per cent from 0.25 per cent.

And in a more drastic step, it is also cutting its overnight deposit rate to minus 0.1 per cent from zero. Charging banks for parking funds with the ECB is an unusual step aimed at pushing banks to lend that money rather than hoard it.

At a news conference, ECB president Mario Draghi says the bank will also offer long-term loans to banks at cheap rates until 2018.

The targeted loans would be charged a fixed rate, meaning that the rate could not rise over the life of the credits, even if the bank raises its benchmark, giving banks confidence that they have cheap funding through to 2018.

Draghi also said the ECB’s policymakers unanimously agreed to consider more unconventional measures to boost inflation if it stays too low.

Investors had been counting on the ECB to take action to save the eurozone region from falling into a deflationary spiral that would choke off growth. Worries about deflation increased earlier this week with the release of data showing that inflation in the eurozone came in at 0.5 per cent in May, down from 0.7 per cent in April.

The latest data also showed that gross domestic product in the eurozone grew by a paltry 0.2 per cent in the first quarter.

Meanwhile, traders also looked ahead to another major economic event: the release Friday of the U.S. government's employment report for May. Economists have forecast that about 219,000 jobs were created during May following a much stronger than expected 288,000 gain in April.

Doubts about reaching that figure were raised Wednesday after payroll firm ADP reported that the U.S. private sector created 179,000 jobs during May, the fewest number in four months.

Prices were mixed on commodity markets with June crude in New York down 16 cents to US$102.48 a barrel.

July copper was unchanged at US$3.09 a pound.

August bullion gained momentum after the ECB announcement, rising $9 to US$1,253.30 an ounce. Traders think that the ECB might launch its own version of quantitative easing to stimulate the economy, which involves buying assets such as bonds.

The Canadian Press


Read more Business News

24667


Recent Trending




Today's Market
S&P TSX14673.48+37.521
S&P CDNX676.81+9.70
DJIA17164.95-251.90
Nasdaq4635.24-48.167
S&P 5001994.99-26.26
CDN Dollar0.7856-0.0067
Gold1286.60-5.10
Oil49.60+3.16
Lumber322.50+0.70
Natural Gas2.87-0.111

 
Okanagan Companies
Pacific Safety0.120.00
Knighthawk0.010.00
QHR Technologies Inc1.400.00
Cantex0.035-0.005
Anavex Life Sciences0.174-0.006
Metalex Ventures0.040.00
Russel Metals23.42-0.16
Copper Mountain Mining0.99+0.01
Colorado Resources0.150.00
ReliaBrand Inc0.01+0.0031
Sunrise Resources Ltd0.050.00
Mission Ready Services0.2350.00

 



24811

FEATURED Property
2046024SENGER ROAD
3 bedrooms 2 baths
$129,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Leaving a job: changing careers

Many people, who find themselves out of work and with time on their hands, and money in their pockets due to lay-off, start thinking about a career change. If you weren’t happy with the directio...


Service fit makes happy employees

Finding the right employees for the front lines of your company is key to developing a great service attitude within your company. It is just as important as hiring the right accountant, manager, sale...


How to price: workbook approach

In 2008 Self Counsel Press published my book - Pricing Strategies for Small Business. The book is now available in Europe, India, Russia and the United States. The purpose of the book was to make avai...

_





24709


Member of BC Press Council


23646