TORONTO – The Canadian dollar closed unchanged Monday after three days of losses amid lower interest rate expectations and mixed commodity prices.
The loonie finished the session at 99.35 cents US after going as low as 99.02 cents US, a six-month low.
The dollar had sold off the previous three sessions, tumbling almost 1 1/2 cents US after the Bank of Canada indicated Wednesday that it will be slower to raise interest rates than had been expected because of economic weakness.
The dollar has been supported in recent months partly on sentiment that the central bank might hike rates later this year. Data released Friday showing low inflation in Canada at the end of 2012 further suggested that investors will have to wait longer for the central bank to move. Higher rates tend to attract investors and push up the currency.
Oil prices advanced with the March crude contract on the New York Mercantile Exchange ahead 56 cents to US$96.44 a barrel.
March copper rose one cent to US$3.66 a pound while February gold bullion was off $3.70 at US$1,652.90 an ounce.
Traders also looked ahead to important economic news coming out this week.
Statistics Canada is expected to report Thursday that the economy grew by 0.2 per cent in November, which would be the highest gain in four months. Last week, the Bank of Canada shaved three-tenths of a point off its projections for growth for both 2012 and 2013, to 1.9 per cent and 2.0 per cent respectively.
On Monday, U.S. data showed that durable goods orders rose by a greater than expected 4.6 per cent in December. That was more than double the consensus forecast for a two per cent gain. The transportation sector was largely responsible for the increase, with orders in that segment up 12 per cent.
The U.S. Federal Reserve wraps up its two-day meeting on interest rates Wednesday. No one expects the central bank to move on rates but traders will look for clues as to when the Fed could end its latest round of economic stimulus.
The Fed minutes from the previous meeting, released Jan. 3, showed a split among members over how long to continue the stimulus, known as quantitative easing. It involves the Fed buying bonds to support the U.S. economy, a move aimed at keeping interest rates low.
Some thought the program should be slowed or stopped before the end of 2013 amid concerns that the bond purchases would destabilize the economy.
The key piece of U.S. data for the week comes out Friday. Economists generally expect the U.S. non-farm payrolls report to show that the American economy created 153,000 jobs in January, slightly below December’s 155,000 reading.
Traders will also take in the latest reading on U.S. economic growth during the week.