TORONTO – The Canadian dollar advanced well over 3/4 of a U.S. cent Monday as oil prices gained ground for a second day and traders looked ahead to a heavy week for economic data, capped by Canadian and U.S. job reports for January.
The loonie was up 0.84 of a cent at 79.31 cents US on hopes that a bottom is in sight for oil prices, which have plunged more than 50 per cent since the highs of last summer.
The March crude contract in New York rose $1.33 to US$49.57 a barrel. Prices had jumped almost $4 on Friday amid news of a big drop in U.S. rig counts as producers respond to oversupply.
Meanwhile, the Institute for Supply Management’s index on U.S. manufacturing showed the sector expanded at a slower pace for a third straight month as a stronger U.S. dollar and damage from the collapse in oil prices weighed on business spending.
The ISM’s index came in at 53.5, down from 55.5 in December.
Markets have been sensitive to any signs of weakness in the U.S. economy, since it has come to be viewed as the major prop for the overall global economy. Growth in China has stalled and the European Central Bank is just now embarking on a program of quantitative easing aimed at stabilizing the eurozone economy and boosting inflation.
U.S. factory orders and vehicle sales data come out Tuesday, the latest trade picture is released Thursday and the week is capped off by the latest snapshot of American job growth.
Economists are looking for the U.S. economy to continue a trend that has seen the creation of around 250,000 new positions a month.
Canadian jobs data also comes out Friday and economists expect Statistics Canada to report that the economy cranked out 5,000 jobs in January.
Metal prices were mixed with March copper unchanged at $2.49 a pound while April gold bullion faded $2.30 to US$1,276.90 an ounce.