TORONTO – The Canadian dollar closed sharply higher Friday as data showed manufacturing shipments rose much more than expected in September.
The loonie was up 0.78 of a cent to 88.68 cents US as manufacturing shipments rose 2.1 per cent to $53 billion after falling 3.5 per cent the previous month. Economists had expected a gain of 1.1 per cent.
Other data out Friday morning showed U.S. retail sales rose 0.3 per cent in October, better than the 0.2 per cent rise that had been expected. Also, the University of Michigan’s consumer sentiment index rose 2.5 points to a reading of 89, the strongest reading since 2007.
Canada’s dollar fell half a U.S. cent on Thursday as concerns about oversupply sent crude down $3 to below the US$75 a barrel level for the first time in four years.
The Energy Information Administration said U.S. oil supplies decreased 1.7 million barrels last week, much larger than the 500,000 barrel drop that analysts expected.
However, gasoline inventories rose by 1.8 million barrels against an expected 280,000 decrease.
An imbalance between supply and demand has helped drive crude prices down by about 30 per cent from the highs of the summer, a time when Iraqi oil supplies were threatened by advances by Islamic State insurgents. Many analysts think the dive in prices to the mid-70s won’t last and point to economic fundamentals suggesting oil should be trading around the $90 level.
Markets are looking ahead to OPEC’s next meeting, scheduled for Nov. 27, where members will decide whether to cut production to support higher prices.
On Friday, the December crude contract on the New York Mercantile Exchange rose $1.61 to US$75.82 a barrel.
Elsewhere on commodity markets, December gold bullion gained $24.10 to US$1,185.60 an ounce. Bullion prices have headed steadily downward recently, pressured in part by a U.S. dollar that has strengthened as the Federal Reserve removed its last quantitative easing stimulus at the end of October.
December copper was ahead five cents at US$3.05 a pound.