TORONTO – The Canadian dollar moved lower on Tuesday as investors became more confident that U.S. leaders could reach a budget agreement in the coming days.
The loonie was down 0.21 of a cent at 101.45 cents US at the end of the trading day.
House Speaker John Boehner said Tuesday he remains hopeful that a fiscal cliff compromise can be reached, but added President Barack Obama has yet to offer a balanced deficit-cutting plan. Boehner said that Obama’s latest offer for US$1.3 trillion in tax increases over the next decade with $850 billion in spending cuts is not balanced enough.
But Boehner’s plan also faces opposition from other quarters. Senate Majority Leader Harry Reid says the Boehner plan can’t pass the Democratic-run Senate.
If congressional Republicans, Democrats and the White House can’t reach a deal by Jan. 1, tax cuts enacted a decade ago for all Americans will expire and government programs will be cut across the board. The combination could lead to a U.S. recession that could spread to other economies of the world.
The loonie also faced a move from Australia’s central bank to cut interest rates, saying that it believes mining investment is reaching its peak.
Oil prices trekked higher as the January crude contract on the New York Mercantile Exchange rose 73 cents to US$87.93 a barrel.
February gold bullion ended down $27.50 to US$1,670.70 an ounce. March copper settled 1.3 cents lower to US$3.65 a pound.