Loonie moves lower as markets await further talks to resolve US budget concerns

TORONTO – The Canadian dollar inched lower on Wednesday as the “fiscal cliff” looms over the U.S. economy.

The loonie was down 0.11 of a cent to 101.34 cents US before markets opened.

While traders appear confident that President Barack Obama and Republican leaders will agree on a plan to avoid the so-called “fiscal cliff,” the resolution still hasn’t been reached.

Meanwhile, the U.S. Commerce Department said that builders broke ground on fewer houses in November likely in part due to Superstorm Sandy in the Northeast. The report says builders began construction of homes at a seasonally adjusted annual rate of 861,000. That’s three per cent lower than October’s annual rate of 888,000, which was the fastest since July 2008.

And the Teranet-National Bank national index of Canadian housing prices fell in November compared with October’s reading — only the fourth time in 13 years of data collection that there has been a decline between the two months.

The composite index covering 11 major urban centres stood at 154.02 last month, down 0.4 per cent from October. Ten of 11 local markets tracked showed declines.

In commodities, oil prices gained traction as the January crude contract on the New York Mercantile Exchange rose 47 cents to close at US$88.40 a barrel.

March copper declined about four cents to US$3.61 a pound while February gold bullion moved down 80 cents to US$1,669.90 an ounce.