Canadian dollar rises amid weak U.S. economic data, mixed commodity prices
Posted Jun 25, 2014 09:44:25 AM.
This article is more than 5 years old.
TORONTO – The Canadian dollar was higher Wednesday as the greenback weakened mid weak U.S. economic data.
The loonie was ahead 0.17 of a cent to 93.25 cents US as the final revision to American economic growth in the first quarter showed that gross domestic product shrank a greater than expected 2.9 per cent, larger than the two per cent contraction economists had expected. However, the decline in economic performance was due in large part to severe winter weather.
Also, U.S. durable goods orders fell one per cent during May, against an expected one per cent gain. The drop was driven by sharp drop in demand for military equipment.
The showing Wednesday left the loonie up about 1.2 cents over the past week to a six month high as oil and gold prices advanced amid geopolitical concerns centred around 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.
On the commodity markets, August crude on the New York Mercantile Exchange gained 22 cents to US$106.25 a barrel.
Oil prices had risen steadily over the past couple of weeks amid a rising insurgency in Iraq. Prices stepped back over the last two days as fears receded that the insurgency would greatly affect the country’s oil production and exports.
However, U.S. benchmark crude futures rose Wednesday after The Wall Street Journal reported that the U.S. government was loosening a long-standing ban by letting two companies sell American oil internationally. The newspaper said the Obama administration would allow foreign buyers to purchase a type of ultralight oil known as condensate, which can be turned into gasoline, jet fuel and diesel.
Metal prices erased early losses with July copper up a cent to US$3.16 a pound, while August bullion faded 20 cents to US$1,321.10.
