Canadian dollar up sharply: risk aversion fades; traders look to slate of data
TORONTO - The Canadian dollar was higher Tuesday ahead of a series of economic data coming out over the next few days.
The loonie was up 0.42 of a cent to 91.12 cents US.
Traders looked to the release Wednesday of the latest snapshot of Canadian economic performance. Statistics Canada was expected to report that gross domestic product rose by 0.2 per cent in February over January. Such a rise would leave GDP rising at an annualized pace of 1.5 per cent for all of the first quarter.
In the U.S., data on consumer confidence and house prices will be released later Tuesday morning.
On Wednesday, the U.S. Federal Reserve wraps up its two-day meeting. Policymakers are expected to further trim the central bank’s bond-buying program and provide further insight into the state of the world’s biggest economy.
Traders also look for further indications of when the Fed might start to raise short term interest rates, which have been near zero since the financial crisis six years ago.
Further U.S. data reports come on Thursday, when preliminary economic data for the first quarter is released, and Friday, with the April non-farm payrolls report. Also out Thursday is China manufacturing data for April, which will provide an update on conditions in the world’s second-biggest economy.
Prices were mixed on the commodity markets with June crude in New York up 47 cents to US$101.31 a barrel.
July copper was down a cent to US$3.08.
Bullion prices were lower after the Pentagon said Russia's defence chief has assured U.S. Defence Secretary Chuck Hagel that Russia will not invade Ukraine.
That came after the U.S. and the European Union unveiled another series of sanctions targeted against Russian businessmen and companies. They say the penalties are being levied because Russia has failed to live up to commitments it agreed to under an international accord aimed at de-escalating the crisis in Ukraine.
Gold fell $9 to US$1,290 an ounce.
The loonie is up about 1/2 a cent this week, passing through a key technical level and partly supported "by ongoing Canadian equity performance (the TSX is up two per cent year to date; while the S&P 500 is flat) as well as several corporate releases that suggest strong oil prices and the level of the Canadian dollar has been a boost to profitability," noted Camilla Sutton, Chief FX Strategist, Managing Director Scotiabank Global Banking and Markets.