Canadian dollar backs off amid U.S. fiscal cliff worries, mixed commodities

TORONTO – The Canadian dollar was lower Thursday amid pessimism over fiscal cliff concerns in the United States.

The currency dipped 0.24 of a cent to 100.64 cents U.S.

The fiscal cliff refers to the double-whammy of tax increases and spending cuts set to click in at the beginning of 2013 in the U.S. if lawmakers do not reach a budget deal.

The combination would erode already weak U.S. economic growth and likely send the economy back into recession, taking other global economies down along with it including Canada’s.

Senate Majority Leader Harry Reid said Thursday the government appears headed over the fiscal cliff because of a lack of progress in negotiations between Republicans who control the House of Representatives and Democrats who control the Senate and White House.

Reid said it is up to congressional Republicans to come up with a plan that both houses would pass and President Barack Obama would sign.

Commodities were mixed with the February crude contract on the New York Mercantile Exchange down nine cents to US$90.89 a barrel.

March copper was a penny higher at US$3.61 a pound after rising five cents Wednesday. The gain, the largest in four weeks, came after workers rejected a wage proposal at BHP Billiton’s Escondida mine in Chile, the world’s biggest source of the metal viewed as an economic barometer.

February gold bullion was up $2.90 to US$1,663.60 an ounce.