Loonie rises amid strong manufacturing data, looming U.S. fiscal showdown
Sep 23, 2013 / 9:18 pm
TORONTO - The Canadian dollar closed higher Monday while commodities failed to benefit from strong manufacturing data out of China and Europe.
The loonie gained 0.13 of a cent to 97.23 cents US.
Traders took in data showing that Chinaâ€™s manufacturing sector rose to a six-month high in September in the latest sign that the worldâ€™s second-biggest economy is gradually recovering from a prolonged slowdown.
The preliminary version of HSBCâ€™s purchasing managersâ€™ index climbed to 51.2 from 50.1 in August on a 100-point scale. Numbers above 50 indicate an expansion in activity.
Another survey suggested that the economic recovery across the 17 European Union countries that use the euro is picking up and that unemployment may be peaking.
The composite purchasing managersâ€™ index, a gauge of business activity across the manufacturing and services sectors published by financial information company Markit, rose for the sixth month running to a 27-month high of 52.1 points in September from 51.5 in August.
November crude on the New York Mercantile Exchange dropped $1.16 to US$103.59 a barrel. Prices fell almost four per cent last week amid dealmaking aimed at eliminating Syriaâ€™s chemical weapons.
December copper lost two cents to US$3.30 a pound while December gold bullion declined $5.50 to US$1,327 an ounce.
Analysts believe the greenback is in for some weakness as investors turn their focus to the U.S., where the possibility of a government shutdown looms amid negotiations to raise the debt ceiling.
Fed chairman Ben Bernanke said last week that concerns over the latest fiscal showdown was a factor in the central bank's decision to maintain the asset purchase program. Analysts had expected the Fed would trim purchases by about $10 billion a month from its current level of $85 billion.
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