Skip to main content

The Globe and Mail

Loonie closes unchanged despite sliding commodity prices

Canadian dollars.

Jeff McIntosh/The Canadian Press

The Canadian dollar closed flat Friday, holding on to the previous day's solid advance despite sliding oil and gold prices.

The loonie ended unchanged at 95.9 cents (U.S.).

The currency had advanced more than half a cent Thursday after Statistics Canada said gross domestic product grew by 0.3 per cent in August against the 0.2 per cent rise that was expected.

Story continues below advertisement

The loonie showed little activity despite encouraging economic readings Friday in the United States and China, two major trading partners.

HSBC Corp. said its monthly purchasing managers' index for China showed its best improvement in seven months, rising to 50.9 from September's 50.2.

An industry group, the China Federation of Logistics and Purchasing, said its index rose to 51.4 from the previous month's 51.1.

The Institute for Supply Management also reported that the U.S. factory sector expanded more than expected in October, rising to 56.4 from 56.2 in September. Anything above 50 indicates expansion.

The ISM data are being carefully weighed as to how it might affect the timing of the U.S. Federal Reserve in cutting back on a key stimulus program, its monthly purchases of $85-billion of bonds.

Earlier this week, the Fed said it would carry on with the program, which is credited with keeping long-term rates low and therefore encouraging more people to buy equities. But there is much speculation about when the Fed might start to taper those asset purchases.

China's annualized economic growth rebounded to 7.8 per cent in the three months ended in September from the previous quarter's two-decade low of 7.5 per cent.

Story continues below advertisement

Strong Chinese data often help lift commodity prices, which in turn supports the Canadian dollar.

However, commodities were lacklustre Friday with December crude on the New York Mercantile Exchange down $1.77 to $94.61 a barrel. Crude has fallen 3.3 per cent this week following data out midweek that showed a sharp spike in U.S. supplies last week.

December copper had received an earlier boost from the Chinese data but later was unchanged at $3.30 a pound while December bullion moved $15.50 lower to $1,308.20 an ounce.

Report an error

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Please note that our commenting partner Civil Comments is closing down. As such we will be implementing a new commenting partner in the coming weeks. As of December 20th, 2017 we will be shutting down commenting on all article pages across our site while we do the maintenance and updates. We understand that commenting is important to our audience and hope to have a technical solution in place January 2018.

Discussion loading… ✨