Canadian dollar advances on economic optimism
Loonies, are displayed on a map of North America, Thursday, Jan. 9, 2014. (Paul Chiasson / THE CANADIAN PRESS)
Published Tuesday, February 4, 2014 9:04AM EST
TORONTO -- The Canadian dollar advanced Tuesday, benefitting from an improved economic outlook and hopes for rising oil exports.
The loonie gained 0.2 of a cent to 90.31 cents US.
That followed a rise of about 1/3 of a cent Monday amid optimism that the controversial Keystone XL pipeline will get U.S. approval. The pipeline, which would carry oilsands crude from Alberta to the Gulf of Mexico, would boost shipments from Canada and lift the economy.
The U.S. State Department said Friday that the proposed TransCanada (TSX:TRP) pipeline would produce less greenhouse gas emissions compared with transporting oil by rail to refineries in Texas.
Also, the International Monetary Fund said Monday that it expects the Canadian economy will grow 2.2 per cent this year, which is up from an estimated 1.7 per cent in 2013 as the U.S. continues to import rising volumes of oil from Canada.
Traders looked ahead to the release of major Canadian economic data coming out later in the week. The merchandise trade balance comes out Thursday while the employment report for January is released Friday.
Economists expect the trade deficit to narrow to about $500 million for December a little over half of November's level. Job creation for January is expected to come in at 15,000.
The U.S. government also releases January employment figures on Friday with economists forecasting that about 190,000 jobs were cranked out during the month.
Traders hope that sub-par manufacturing data released Monday won't translate into a weak employment report.
Equity markets suffered sharp losses and U.S. bond yields declined as data showed the American manufacturing sector expanding at a slower than expected pace during January.
Other data showed a similar performance for China's manufacturing sector last month, which added to anxieties about emerging markets.
On the commodity markets, March crude oil in New York gained 22 cents to US$96.65 a barrel, March copper gained a cent to US$3.19 while April gold lost $9.70 to US$1,250.20 an ounce.