The Canadian dollar closed little changed Monday after a weekend meeting of the G20 countries endorsed Japan’s efforts to end a 15-year battle against deflation through an aggressive monetary policy.The Canadian dollar edged up 0.02 of a cent to 97.46 cents (U.S.).
The Bank of Japan’s plan involves buying more than ¥7-trillion ($70-billion U.S.) of bonds a month with a view to increasing inflation to 2 per cent within two years.
However, the moves have depressed the yen, which has stirred up concerns among the Japanese exporters’ key rivals that Japan’s real goal is to weaken the yen as a way to gain trade advantages.
But officials at the G20 meeting were reluctant to voice any opposition to the Bank of Japan’s monetary stimulus program.
Traders also took in data showing that sales of previously occupied U.S. homes dipped in March. The National Association of Realtors said Monday that sales dipped to a seasonally adjusted annual rate of 4.92 million from 4.95 million in February. February’s figure was revised lower.
Sales in March were 10.3 per cent higher than a year earlier.
Commodity prices were mixed after severe downturns last week.
The May crude contract on the New York Mercantile Exchange, which expired Monday, rose 75 cents to $88.76 a barrel after prices fell 3 per cent last week. The June contract advanced 92 cents to $89.19. Data showing a weakening Chinese economy and a downgrade of global economic growth by the International Monetary Fund raised demand concerns and pushed crude down 3 per cent last week.
Gold prices were higher with the June contract in New York ahead $25.60 to $1,421.20 an ounce. Bullion plunged to its lowest level in more than two years last week, falling 7 per cent amid a growing conviction that inflation is firmly under control. Buying gold as a hedge against inflation has supported gold prices to record highs of almost $2,000 back in 2011.
However, copper prices continued to hover at 18-month lows. The metal, widely viewed as an economic barometer because it is used in so many applications, fell 2 cents to $3.13 a pound on top of a 6 per cent slide last week.
Risk appetite was also improved after the Italian parliament over the weekend re-elected Giorgio Napolitano as president, following weeks of political uncertainty.
“We think President Napolitano’s re-election is strongly tied to the formation of a grand coalition and to the implementation of its policies,” said a commentary from Barclays.
Elections in late February left Europe’s third-biggest economy without any one party getting enough votes to form a government.