Loonie lower as oil slides, Conference Board, IMF issue positive forecasts

TORONTO – The Canadian dollar closed lower Wednesday amid data suggesting the Canadian economy will improve over the next two years.

The loonie was down 0.59 of a cent to 94.38 cents US as oil prices retreated and traders also digested a slate of U.S. economic data.

The slide also came amid a pair of reports suggesting the Canadian economy will improve.

The Conference Board of Canada expects gross domestic product to grow by 2.4 per cent in 2014 and 2.6 per cent in 2015, following a tepid rise of just 1.8 per cent this year.

At the same time, the International Monetary Fund says Canadian GDP will grow 1.6 per cent in 2013 and 2.25 per cent in 2014.

Traders also took in data showing that U.S. jobless insurance claims, which are a proxy for layoffs, fell by 10,000 last week to 316,000. Economists had expected a slight rise.

At the same time, orders for American durable goods fell two per cent in October, which was in line with expectations. Excluding transportation, orders dipped 0.1 per cent.

A key gauge of the manufacturing sector in the U.S. Midwest showed slower expansion. The Chicago purchasing managers index dropped to a higher than expected 63 in November from 65.9 in October.

The U.S. Conference Board said its leading economic indicator rose 0.2 per cent during October. That data gives an indication on where the American economy is heading over the next six months.

And the University of Michigan released its latest reading on U.S. consumer sentiment. It rose to 75.1 in November from 73.2 in October, better than the 73 reading that had been expected.

On the commodity markets, the January crude contract fell $1.38 to US$92.30 a barrel. Supply data for last week showed oil supplies rose about three million barrels. A decline of 1.5 million barrels had been expected. Crude supplies have now increased for the past 10 weeks.

March copper was down three cents at US$3.19 a pound while December gold bullion lost $3.60 to US$1,237.90 an ounce.