TORONTO – The Canadian dollar closed higher Thursday as strong Chinese trade data improved risk sentiment on financial markets.
The commodity-sensitive currency gained 0.32 of a cent to 101.57 cents US as prices for oil and metals ran ahead after data showed that China’s exports and imports grew substantially last month.
China’s export growth more than quadrupled in December from the previous month to 14.1 per cent while imports, which failed to grow at all in November, rose six per cent in a sign of increasing domestic demand.
China’s trade surplus unexpectedly surged to $31.6 billion in the month, leaving the 2012 total at $232 billion, the widest since 2008.
Commodities advanced in the wake of the trade data. China’s strong demand for commodities in the past has pushed prices for oil and metals higher and also supported energy and mining stocks.
The February crude contract on the New York Mercantile Exchange gained 72 cents to US$93.82 a barrel after earlier hitting a three-month high of US$94.70 a barrel. Prices also got a boost from a report that Saudi Arabia cut its crude production by nearly five per cent last month to the lowest level in 19 months.
The March copper contract advanced four cents to US$3.71 a pound. China is the world’s biggest consumer of the metal.
Gold prices also climbed with the February contract up $22.50 to US$1,678 an ounce.
On the economic front, Statistics Canada reported that municipalities issued building permits worth $6.2 billion in November, down 17.9 per cent from October and the lowest number since January 2012. The drop followed a 15.9 per cent increase in October and was greater than the 7.6 per cent that analysts had expected.
Meanwhile, the Bank of England left its base interest rate and its monetary stimulus program unchanged, as widely anticipated by analysts. The central bank’s Monetary Policy Committee left the key rate at 0.5 per cent, where it has been since March 2009.
The Bank of England’s stimulus program, called quantitative easing, was also not increased from its current 375 billion pounds (US$604 billion).
Meanwhile, the European Central Bank announced it was leaving its key rate unchanged at 0.75 per cent.
