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 donâ€™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 wonâ€˜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.
Read more Business News
- Pool closed next summerPenticton / S. Okanagan - 10:22 am
- Temporary entrance to KGHKelowna - 10:56 am
- Mayor's field already crowdedKelowna - 5:00 am
- Election packages available FriWest Kelowna - 5:00 am
|QHR Technologies Inc||1.22||+0.02|
|Anavex Life Sciences||0.261||+0.001|
|Copper Mountain Mining||2.88||+0.11|
|Sunrise Resources Ltd||0.025||-0.005|
|Mission Ready Services||0.24||+0.04|
Let’s face it; nobody wants to pay for legal services if they do not have to, but if you have been injured in an accident you may have thought about hiring a lawyer to help you navigate your cla...
Finally, after three months in New Brunswick, I am back home in the sunny Okanagan. It is a delight to be home and the lake, vistas, people and climate never disappoint. Like many people however, I...
My screen printing business, like many others, started as a one-man operation. It was located in a small building, not much better than a shack, with a telephone, a big table where I ate lunch and (oc...