The Canadian dollar was higher Monday as Statistics Canada reported that the economy grew for the fourth consecutive month in a row.
The loonie jumped 0.45 (U.S.) of a cent at 94.36 cents.
The federal agency said gross domestic product for October came in at 0.3 per cent. Output from goods-producing industries up 0.4 per cent, mainly from the manufacturing sector, while output from service industries was up 0.3 per cent, with almost all the major industrial sectors showing growth.
The reading was stronger than anticipated. Economists had expected the GDP to grow by 0.2 per cent in October, compared with September’s increase of 0.3 per cent.
Fred Ketchen, a manager of equity trading for ScotiaMcLeod, said that recent good economic news has propped up the Canadian dollar.
“Our dollar is seen as a strong currency. We’ve got an economy that is growing more than expected and that adds support,” he said. “Things in Canada are not totally robust, but it’s not a disaster anywhere. There is a general acceptance of modest growth.” Ottawa also reported that it ran a deficit of $2.5-billion (Canadian) in October, unchanged from the same month last year. The monthly fiscal monitor says Ottawa’s revenue slipped by $100-million, while increased revenue from personal income tax and other sources was offset by lower revenue from corporate taxes and GST.
In October, the government increased program spending by $100-million in October, while public debt charges fell $200-million. For the fiscal year so far, the deficit stands $13.2-billion, compared with a deficit of $11.9-billion at the same time last year.
There was also more positive news from the U.S.
The Commerce Department reported that Americans increased their spending in November by the most in five months, and their income edged up modestly.
It said consumer spending rose 0.5 per cent from October, when spending had risen 0.4 per cent. It was the best showing since June. The gain was driven by a jump in spending on long-lasting durable goods such as autos.
Consumers’ income rose 0.2 per cent, an improvement from a 0.1-per-cent decline in October. Wages and salaries, the most important component of income, rose a solid 0.4 per cent. The gain reflected strength in the private sector and a modest gain in government pay.
Meanwhile, the commodity markets got off to a weak start as February crude lost 41 cents (U.S.) to $98.91 a barrel.
Gold prices were lower with the February contract on the New York Mercantile Exchange down $2.60 to $1,201.10 an ounce.
Bullion prices have fallen sharply since last week following the Federal Reserve’s announcement that it will begin scaling back its monthly asset purchases by $10-billion to $75-billion beginning in January.
“It’s in a range now. It’s been in that range for a long time and I don’t see it leaving that range,” Ketchen said of gold.
The March copper contract rose a cent to $3.31 a pound.