Loonie takes further gains day after Fed's latest announcement

TORONTO – The Canadian dollar edged slightly lower on Thursday against the greenback as concerns about the “fiscal cliff” scenario persisted.

The loonie fell 0.01 of a cent to 101.54 cents US, after earlier rising to its highest level against the U.S. dollar in two months.

In commodities, the February bullion dropped $21.10 to close at US$1,696.80 an ounce.

Crude oil prices for January backed off 88 cents to US$85.89 a barrel on the New York Mercantile Exchange. Copper prices also fell, with the March contract on the Nymex dropping 5.6 cents to US$3.66 a pound.

In Washington, House Speaker John Boehner said that the White House was so resistant to cutting government spending that it risked pushing the country off the “fiscal cliff.”

The cliff scenario involves an end-of-year deadline when automatic spending cuts and tax increases are set to take place. With economic growth already weak, the worry is that the two moves would send the U.S. back into recession, sending shockwaves around the world.

In U.S. economic data, the Commerce Department said Americans spent more on autos, electronics and building supplies in November, pushing retail sales up 0.3 per cent in last month. That offset a 0.3 per cent decline in October.

And the U.S. Labour Department said fewer Americans applied for unemployment benefits last week, the fourth straight weekly decline. The seasonally adjusted figure of 343,000 was the lowest level in two months and the second-lowest total this year.