Tuesday, October 13th2.6°C

Canadian dollar rises amid U.S. economic concerns, mixed commodity prices

TORONTO - The Canadian dollar closed higher Friday, while an index measuring price changes for major commodities sold by manufacturers in Canada dipped last month.

The loonie was up 0.28 of a cent at 93.8 cents US.

Statistics Canada's Industrial Product Price Index was down 0.5 per cent in May, mainly because of lower prices for energy and petroleum products.

Diesel fuel, light fuel oils and gasoline were the main reasons for the decline in this commodity group.

Elsewhere on the economic calendar, the University of Michigan's widely watched U.S. consumer sentiment index rose to 82.5, an improvement on the 81.9 reading that economists had forecast and up from a flash estimate of 81.2.

But the report failed to reassure investors rattled this week by a 2.9 per cent contraction in U.S. gross domestic product in the first quarter, almost a full point higher than expected.

Markets had initially shrugged off the data on expectations the American economy would jump ahead in the second quarter as the deterioration was largely blamed on severe winter weather. But concerns resurfaced Thursday as a new report showed a worse than expected reading on consumer spending and consumption.

The report also sparked concerns about whether the American economy can take the strain of higher interest rates, particularly after St. Louis Federal Reserve president James Bullard said markets don’t realize how close the U.S. central bank is to reaching its targets of low unemployment and stable prices. That prompted speculation the Fed hike rates as soon as the first quarter of 2015.

Traders are looking ahead to key economic data next week for reassurance that the economy is indeed on track for a strong second quarter, including the June reading on the manufacturing sector from the Institute for Supply Management and the release Thursday of the U.S. government's employment report for June.

Commodity prices were mixed with August crude losing a dime to US$105.74 a barrel. Crude prices have declined this week in the wake of the weaker than expected U.S. consumer data and expectations that the sectarian fighting in Iraq won‘t spread to that country's oil-producing south.

September copper was unchanged at US$3.17 a pound, while August bullion rose $3 to US$1,320 an ounce.

The loonie has had a positive month, up about 1 1/2 cents to a six-month high as gold and oil prices rose amid geopolitical concerns centred on a rising insurgency in Iraq and tensions between Ukraine and Russia.

The loonie had also found support from stronger than expected inflation data, which raised expectations that the Bank of Canada could raise interest rates sooner than thought.

The Canadian Press

Read more Business News


Recent Trending

Today's Market
S&P TSX13964.36-14.30
S&P CDNX552.26+5.20
S&P 5002017.46+2.57
CDN Dollar0.7660-0.003
Natural Gas2.51-0.03

Okanagan Companies
Pacific Safety0.225-0.005
QHR Technologies Inc1.25+0.02
Metalex Ventures0.07+0.02
Russel Metals21.26-0.29
Copper Mountain Mining0.66+0.05
Colorado Resources0.07+0.00
ReliaBrand Inc0.0245+0.0070
Sunrise Resources Ltd0.02+0.00
Mission Ready Services0.075-0.005
Decisive Dividend Corp3.25+0.14
Diamcor Mining0.97+0.03



2446071#107-1565 Noble Court
1 bedrooms 1 baths
more details
Click here to feature your property
Please wait... loading

Income for life?

Photo: Thinkstock.comIn almost every conversation I have with clients these days, the topic swings to interest rates. What direction they’re going, how long will they stay where they are and how...

Perfect (reno'd) home

Photo: Thinkstock.comHow many times have you found a home in the perfect location, but it needs too much work as per the home inspection? There is a great program available through most lenders that w...

5 Claim misconceptions

Photo: Thinkstock.comIf you have been hurt in an accident or as a result of medical negligence you will likely look to your friends and family for some advice on how to deal with the situation. These ...


Member of BC Press Council