TORONTO - The Canadian dollar closed higher against the greenback Monday despite commodity prices that backed off following solid gains last week.
The currency was ahead a tenth of a cent to 104.55 cents US.
"The currency is holding in well, considering oil prices have fallen from their recent peak, yield spreads are moving against it and the U.S. dollar is broadly stronger," observed a commentary from Scotia Capital.
The movement came as traders looked to Tuesday's interest rate announcement from the Bank of Canada. It is widely expected the central bank will leave its key rate unchanged at one per cent but will be looking to its accompanying statement for its take on the economy and the impact of a rapidly rising loonie, which started the year just above par with the U.S. dollar.
Oil prices tumbled as the May contract fell $2.87 to US$109.92 a barrel after jumping almost US$5 last week. Prices are still up about 29 per cent from mid-February to 2 1/2-year highs amid a civil war in Libya and unrest in other Mideast countries.
Copper prices were also lower following a jump of almost six per cent last week with the May contract on the Nymex down four cents to US$4.46 a pound.
Bullion moved below Friday's latest record close with the June contract in New York $6 lower to US$1,468.10.
There's a raft of other economic data this week, including Canadian international trade and manufacturing shipment data as well as U.S. retail sales and industrial production figures and China's first estimate for economic growth in the first quarter of the year.
Expectations of the latter may be negatively affected by the news that China posted a trade deficit in the first three months of the year, its first since 2004. Higher commodity and energy costs as well as the country's insatiable demand for raw materials were the main reasons behind the deficit.
