Canadian dollar gives back advances amid sliding crude oil prices

TORONTO – The Canadian dollar closed sharply lower Thursday, giving up some of the strong advance of the previous session as oil prices resumed sliding towards the US$40-a-barrel level.

The loonie was down 0.97 of a U.S. cent to 78.58 cents.

Canada’s dollar had jumped more than 1 1/4 cents Wednesday, while the greenback weakened, after the U.S. Federal Reserve wrapped up its interest rate meeting by announcing it was dropping its reference to a “patient” approach to raising rates.

But it also emphasized that it would wait to hike rates until it has seen “further improvement in the labour market and is reasonably confident that inflation will move back to its two per cent objective over the medium term.”

Fed chair Janet Yellen also told a news conference that the removal of the word patient “doesn’t mean we’re going to be impatient.”

Meanwhile, the April crude contract in New York fell 70 cents to US$43.96. Oversupply concerns have hit prices hard recently, with crude down 14 per cent over the past eight sessions as inventories continue to climb. U.S. oil stockpiles rose by 9.6 million barrels last week, much more than expected.

The latest worry is that oil storage space is becoming full, which could further depress prices.

Metals were higher with April gold bullion ahead $17.70 to US$1,169 an ounce while May copper gained nine cents to US$2.67 a pound.