TORONTO – The Canadian dollar closed higher Thursday amid rising gold and copper prices while traders took in positive trade data and awaited the latest reading on economic growth.
The loonie was up 0.49 of a cent to 97.09 cents US as a widely-watched measure of Canadian trade performance with the rest of the world improved somewhat in the first quarter. Statistics Canada says the country’s Canada’s current account deficit on a seasonally adjusted basis shrank by $500 million to $14.1 billion.
The agency is also expected to report Friday that gross domestic product rose by 0.1 per cent in March, which would add up to an annualized advance of 2.2 per cent in the quarter.
Oil prices erased early losses and the July crude contract on the New York Mercantile Exchange gained 48 cents to US$93.61 a barrel. Prices improved after data from the U.S. Energy Department’s Energy Information Administration said stockpiles increased by three million barrels last week. The American Petroleum Institute had reported a bigger, 4.4 million-barrel increase in inventories on Wednesday.
Traders also looked to a meeting of the Organization of Petroleum Exporting Countries on Friday to discuss, among other things, production levels.
Overhanging the meeting is the rise of shale oil production in the U.S. and a report from the International Energy Agency saying total production could top nine million barrels a day by 2018. That would mean near self-sufficiency for the U.S. as well as significantly less dependence on OPEC imports.
Gold was up $20.20 to US$1,412 an ounce while copper futures were ahead two cents at US$3.32 a pound.
The decline in the loonie on Thursday followed a rise of 0.4 of a cent in the previous session as the Bank of Canada said it was keeping its key rate unchanged at one per cent and added that “recent economic indicators suggest that growth in the first quarter was stronger than the bank projected in April.”
On the American economic front, a second reading on U.S. gross domestic product for the first quarter showed GDP coming in at an annualized rate of 2.4 per cent, a bit below the initial reading of a 2.5 per cent gain. But the showing was still a marked improvement from the 0.4 per cent gain in the final quarter of 2012.
And the number of Americans seeking unemployment aid rose 10,000 last week to a seasonally adjusted 354,000, a sign layoffs have increased. The U.S. Labor Department also said the four-week average, a less volatile measure, increased 6,750 to 347,250, the third straight gain. The average had fallen to a five-year low of 338,000 earlier this month.
There was positive news from the American housing sector. The National Association of Realtors said its seasonally adjusted index for pending U.S. home sales rose 0.3 per cent to 106, the highest since April 2010, when a homebuyer tax credit inflated sales. Signed contracts have jumped 10.3 per cent in the past 12 months.