Canadian dollar lower amid mixed commodity prices, World Bank revisions

TORONTO – The Canadian dollar closed lower Wednesday amid falling metal prices and a reduced global economic growth forecast from the World Bank.

The loonie fell 0.21 of a cent to 101.41 cents US as traders also took in the latest take on the U.S. economy by the Federal Reserve.

Its so-called Beige Book said 12 of its regional banking districts reported “modest or moderate” growth in the final weeks of 2012. But the Fed also reported that employers in some parts of the country delayed hiring because of uncertainty over the fiscal cliff. Congress and the White House reached a deal on taxes on Jan. 1, but put off decisions on government spending cuts.

The World Bank on Tuesday projected that the global economy will expand by 2.4 per cent in 2013, down from a forecast of three per cent growth in June.

The March copper contract lost three cents to US$3.61 a pound while February bullion declined 70 cents to US$1,683.20 an ounce.

Oil prices were off the lows of the morning as data showed an unexpected drop in U.S. inventories last week.

The U.S. Energy Information Administration said crude supplies declined by one million barrels last week. Analysts polled by Platts expected a 2.5 million-barrel climb.

February crude on the New York Mercantile Exchange was up 96 cents at US$94.24 a barrel.

Also in the background was increasing nervousness about a fight brewing in Washington over raising the U.S. debt ceiling so that the government can keep borrowing money to pay its bills. The U.S. Treasury says it will run out of money to pay all the government’s obligations sometime in February or March if Congress doesn’t raise the current $16.4 trillion limit on borrowing.