The Canadian dollar closed higher Wednesday as the greenback fell amid weak U.S. economic data.
The loonie gained 0.19 of a cent to end at 93.27 cents (U.S.) as the final revision to American economic growth in the first quarter showed that gross domestic product shrank an annualized 2.9 per cent, larger than the 2 per cent contraction economists had expected. However, the decline in economic performance was due in large part to severe winter weather.
Also, U.S. durable goods orders fell 1 per cent in May, against an expected 1 per cent gain. The drop was driven by sharp drop in demand for military equipment.
The showing Wednesday left the loonie up about 1.2 cents over the past week at a six-month high as oil and gold prices have advanced amid geopolitical concerns centred on a rising insurgency in Iraq and tensions between Ukraine and Russia.
The loonie had also found support from stronger-than-expected inflation data, which raised expectations that the Bank of Canada could raise interest rates sooner than thought.
On the commodity markets, August crude on the New York Mercantile Exchange gained 47 cents to $106.50 a barrel.
Oil prices have risen steadily over the past couple of weeks amid a rising insurgency in Iraq. However, prices had stepped back over the previous two days as fears receded that the insurgency would greatly affect the country’s oil production and exports.
U.S. benchmark crude futures rose Wednesday after The Wall Street Journal reported that the U.S. government was loosening a long-standing ban by letting two companies sell American oil internationally. The newspaper said the Obama administration would allow foreign buyers to purchase a type of ultralight oil known as condensate, which can be turned into gasoline, jet fuel and diesel.
Metal prices erased early losses with July copper up 2 cents to $3.17 a pound, while August gold bullion added $1.30 to $1,322.60.