TORONTO – The Canadian dollar closed lower Tuesday following four days of gains that lifted the currency to its highest level since early January.
The loonie dipped 0.15 of a cent to 93.08 cents US as the U.S. dollar strengthened in the wake of strong housing sales and consumer confidence data.
The Canadian currency had jumped almost 1.2 cents since last Tuesday’s close, as oil and gold prices advanced 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.
On Tuesday, traders digested data showing that U.S. home prices rose in April from a year ago at the slowest pace in 13 months, reflecting a recent drop-off in sales. The Standard & Poor’s/Case-Shiller 20-city home price index rose 10.8 per cent in April from 12 months earlier, down from 12.4 per cent in the previous month and the smallest since March 2013.
But the U.S. Commerce Department reported that new home sales surged 18.6 per cent in May to an annual rate of 504,000, the fastest pace in six years. That was much higher than the 440,000 reading that economists had expected.
Also, the New York-based Conference Board’s June reading on consumer confidence ran ahead to a better than expected reading of 85.2.
Oil prices ticked lower with the August crude contract on the New York Mercantile Exchange down 14 cents to US$106.03 a barrel.
Crude prices had risen steadily over the past couple of weeks amid a rising insurgency in Iraq. But prices started falling on Monday as fears receded about the affect on oil production and exports.
The bulk of Iraq’s production and export operations are in the south, which have so far been spared in this month’s advance by the al-Qaeda inspired group.
OPEC Secretary General Abdullah Al-Badry said Tuesday that Iraq is “still producing as normal,” with 95 per cent of its capacity in the country’s south being unaffected by the violence.
Gold prices have also steadily advanced this month because of geopolitical worries centred on Iraq and Ukraine and on Tuesday the August bullion contract in New York rose $2.90 to US$1,321.30 an ounce.
Copper was unchanged at US$3.15 a pound following a three-cent rise Monday sparked by strong Chinese manufacturing data.