TORONTO – The Canadian dollar closed higher Wednesday, finding late-day lift as oil prices ran ahead on reassurance about the U.S. economy.
The loonie rose 0.07 of a cent to 83.72 cents US.
Oil prices were positive after three days of sharp declines as the February crude contract in New York ran ahead $2.59 to US$48.48 a barrel.
Oil prices improved mid-afternoon after the Federal Reserve said in its latest regional economic survey that the U.S. economy was growing at a moderate pace in December and early January, helped by gains in sales of autos and other consumer products, increased factory production and a pickup in tourism in various parts of the country.
Crude prices have collapsed since June 2014, down almost 60 per cent amid a glut of supply. Negative days for oil and energy companies have been the norm lately as the price slide accelerated from the end of November when OPEC said it wouldn’t cut production to support prices.
However, metal prices fell as a World Bank report said it now expects the global economy to expand three per cent in 2015, down from its earlier forecast of 3.4 per cent. It said that a strengthening U.S. economy and the fall in oil prices won’t be enough to offset troubles in the eurozone and emerging markets.
Copper prices were slammed as the March contract tumbled 14 cents to US$2.51 a pound, on top of a 12-cent slide over the previous three sessions as inventories of the metal viewed as an economic bellwether grow. Copper prices have also been impacted by slowing growth in China and have tumbled 25 per cent over the past year.
The currency had been lower in the morning following comments from Bank of Canada deputy governor Timothy Lane that the collapse in oil prices is bad for Canada.
He said Tuesday that although lower oil prices produce benefits such as putting more cash in consumers’ pockets, the gains will be more than outweighed by the losses because lower incomes in the oilpatch and along its supply chain that will hurt the rest of Canada’s economy.
Gold prices were little changed with the February contract ahead a dime to US$1,234.50 an ounce.