The Canadian dollar closed higher Monday amid mixed, but generally positive economic news.
The loonie rose 0.22 of a cent to end at 93.23 cents (U.S.) on top of a gain of almost two-thirds of a cent on Friday to levels last seen in early January. The currency rose sharply as higher-than-expected inflation data on Friday raised questions about whether the Bank of Canada might move interest rates higher sooner than thought.
“On the back of the CPI release, expectations for the [Bank of Canada] first interest rate hike increased marginally, but still stand at just a 13 per cent probability in the next year,” said Camilla Sutton, chief foreign exchange strategist at Bank of Nova Scotia.
Meanwhile, data released Sunday showed the Chinese manufacturing sector moving into expansion territory. HSBC’s purchasing managers index hit a seven-month high at 50.8, the first time the index has moved above the 50 level since December.
However, other data showed that business activity in the euro zone slowed for a second successive month in June. Data firm Markit said its composite purchasing managers index for the euro zone fell to 52.8 from 53.5 in May. Activity in Germany’s private sector slowed slightly, but the main source of weakness for the euro zone was once again France.
In the U.S., the Markit Economics flash manufacturing purchasing managers index edged higher in June, rising to 57.5 from 56.4 in May. The index is at its highest level since May 2010.
Also, sales of U.S. existing homes jumped 4.9 per cent in May in the best monthly gain in nearly three years. Sales increased to a seasonally adjusted annual rate of 4.89 million homes.
The Chinese data helped push July copper up 3 cents to $3.15 a pound.
Bullion prices added to gains racked up last week amid tensions between Ukraine and Russia and a growing insurgency in Iraq. August gold rose $1.80 to $1,318.40 an ounce.
Oil prices declined after rising steadily over the past two weeks as a Sunni uprising gained momentum in Iraq with the August contract off 66 cents at $106.17 a barrel.