Canadian dollar rises amid positive economic news, rising commodities
TORONTO — The Canadian dollar was higher Monday while commodities rose amid further indications that U.S. interest rates will stay near zero and positive economic news from Europe.
The loonie rose 0.69 of a cent to 100.82 cents US.
The greenback lost ground after Federal Reserve chairman Ben Bernanke said the U.S. job market remains weak despite three months of strong hiring and that the Federal Reserve’s existing policies will help boost growth.
Bernanke’s comments were a strong indication that the central bank is prepared to keep its low-interest rate policies in place for some time to come despite the recent signs of economic growth.
Market sentiment also got a lift after German chancellor Angela Merkel said her country may be willing to temporarily increase the eurozone’s bailout funds to C700 billion.
The 17-country eurozone is under pressure to raise its financial firewalls to boost confidence in struggling countries like Italy and Spain.
Also, a closely watched survey shows that German business confidence rose for the fifth month in a row. The Ifo Institute said its main confidence index rose to 109.8 points from 109.6 in February.
Germany’s economy has been traditionally powered by exports but helped lately by increasingly strong domestic demand. Europe’s largest economy has been a bright spot over the past couple of years.
Oil prices advanced as investors weighed concerns over global economic growth against possible disruptions in crude supplies due to an international standoff over Iran’s nuclear program.
The May crude contract on the New York Mercantile Exchange edged up 11 cents to US$106.98 a barrel.
Copper prices were up seven cents to US$3.88 a pound on the Nymex. Prices for the metal fell last week after HSBC’s Chinese manufacturing index went deeper into contraction during March. Copper prices were also under pressure amid soft Chinese housing data and a warning from miner BHP Billiton.
China is the world’s biggest consumer of copper, viewed as an economic bellwether as it is used in so many industries. China itself has been a major prop for a fragile global economic recovery.
Bullion prices also moved higher with the April contract up $22.70 to US$1,685.10 an ounce.