The Canadian dollar closed higher Tuesday ahead of a slate of economic data coming out over the next few days and remarks from the top two officials at the Bank of Canada.
The loonie closed up 0.62 of a cent at 91.32 cents (U.S.) as central bank Governor Stephen Poloz and deputy governor Tiff Macklem were set to appear later in the day before the House of Commons finance committee to discuss the bank’s monetary policy report.
Meanwhile, data showed that U.S. home price gains cooled in February for the third month in a row, as harsh winter weather and high buying costs slowed sales.
The Standard & Poor’s/Case-Shiller 20-city home price index rose 12.9 per cent in February from 12 months earlier. While healthy, that is down from a 13.2 per cent gain in January.
Other data from the U.S. Conference Board showed its consumer confidence index came in at 82.3 for April. But the March reading was revised upward to 83.9 from 82.3.
Traders also looked to the release Wednesday of the latest snapshot of Canadian economic performance. Statistics Canada was expected to report that gross domestic product rose by 0.2 per cent in February from January. Such a rise would leave GDP rising at an annualized pace of 1.5 per cent for all of the first quarter.
Also on Wednesday, the U.S. Federal Reserve wraps up its two-day meeting. Policy makers are expected to further trim the central bank’s bond-buying program and provide further insight into the state of the world’s biggest economy.
Traders will also look for further indications of when the Fed might start to raise short-term interest rates, which have been near zero since the financial crisis six years ago.
Further U.S. data reports come on Thursday, when preliminary economic data for the first quarter is released, and Friday, with the April non-farm payrolls report. Also out Thursday is China manufacturing data for April, which will provide an update on conditions in the world’s second-biggest economy.
Prices were mixed on the commodity markets with June crude in New York up 44 cents to $101.28 a barrel.
July copper was down 2 cents to $3.07 a pound.
Bullion prices were lower after the Pentagon said Russia’s defence chief has assured U.S. Defence Secretary Chuck Hagel that Russia will not invade Ukraine.
That came after the United States and the European Union unveiled another spate of sanctions targeted against Russian businessmen and companies. They say the penalties are being levied because Russia has failed to live up to commitments it agreed to under an international accord aimed at de-escalating the crisis in Ukraine.
Gold faded $2.70 to US$1,296.30 an ounce.
The loonie is up almost three-quarters of a cent this week, passing through a key technical level and partly supported “by ongoing Canadian equity performance (the TSX is up 2 per cent year to date; while the S&P 500 is flat) as well as several corporate releases that suggest strong oil prices and the level of the Canadian dollar has been a boost to profitability,” noted Camilla Sutton, chief foreign exchange strategist at Bank of Nova Scotia.