Canadian dollar closes lower amid global economic concerns

TORONTO – The Canadian dollar closed lower Wednesday with traders generally avoiding riskier assets in the wake of reduced economic growth expectations from the International Monetary Fund.

The currency slipped 0.22 of a cent to 101.97 cents US as traders also took in data showing rising economic growth at the end of the summer in nearly every region of the United States. The Federal Reserve says in its latest regional survey that growth improved in 10 of its 12 regional banking districts from mid-August through September. Rising home sales helped lift home prices in most districts.

The report, known formally as the Beige Book, also cited an increase in auto sales in most parts of the U.S.

Still, consumer spending was flat or up only slightly in most districts.

The IMF on Tuesday reduced its growth forecast for the world economy to 3.3 per cent this year from the previous estimate of 3.5 per cent. Its forecast for growth in 2013 is 3.6 per cent, down from 3.9 per cent three months ago and 4.1 per cent in April.

The IMF also reiterated its concerns over the crisis in the eurozone and warned that the recession in Spain was worse than it thought.

Adding to concerns about slowing growth was Alcoa Inc. The resource giant kicked off the start of the third-quarter earnings season late Tuesday and predicted aluminum demand would grow six per cent this year, down from seven per cent in the previous quarter, primarily because of slower growth in China.

The aluminum producer is viewed as a broad economic bellwether as its products are used in a wide variety of industries, from vehicles to appliances.

Oil prices continued to find support from worries that the fighting in Syria could impact Mideast oil supplies. The November crude contract on the New York Mercantile Exchange gained $1.16 to US$93.55 a barrel, adding to a gain of more than $3 Tuesday, even as the Organization of the Petroleum Exporting Countries lowered its forecast for global oil demand in 2012.

OPEC said that world oil demand will grow by 800,000 barrels a day in 2012, down 100,000 barrels from its previous forecast.

December gold added 10 cents to US$1,765.10 an ounce while December copper was unchanged at US$3.71 a pound.