Loonie lower after big runup metal prices back off on China concerns

Loonie lower after big run-up, metal prices back off on China concerns by Malcolm Morrison, The Canadian Press Posted Jul 12, 2013 8:55 am MDT TORONTO – The Canadian dollar closed lower Friday after surging well over a full US cent the previous session amid a growing likelihood that the U.S. Federal Reserve’s monetary policy will remain loose for the time being.The loonie edged down 0.1 of a cent to 96.19 cents US.The loonie’s gain of 1.21 cents US came in the wake of reassurances from Fed chairman Ben Bernanke that the central bank was in no hurry to curtail key economic stimulus measures.The greenback fell sharply after Bernanke said that the U.S. needs a “highly accommodative monetary policy,” or low interest rates, for the foreseeable future. The Fed is buying US$85 billion a month in bonds to keep interest rates low.Traders also looked ahead to next Wednesday and the next interest rate announcement and monetary policy report by the Bank of Canada. It will be the first policy decision by Stephen Poloz since he took the helm at the central bank in early June.“To this point, there have been very few appropriate times for the governor to play his cards,” observed Ian Pollick, fixed income strategist at RBC Dominion Securities. “And it will be very telling how he characterizes both the current economic situation, as well as how he might potentially change the forward-looking language.”Analysts expect the Bank of Canada to leave its key rate unchanged at 1.25 per cent until well into 2014 at least.Signs of higher demand in the U.S. pushed the August crude contract on the Nymex up $1.04 to US$105.95 a barrel, up 2.6 per cent for the week.Copper prices were depressed after China’s finance minister suggested that growth could come in at seven per cent for this year, which is below the government’s official forecast.Surprisingly weak trade figures earlier this week raised the prospect that China’s slowdown will be sharper than anticipated as China’s central bank tightens credit to reduce financial distortions. China releases April-June growth figures on Monday morning and that could well determine trading next week.The September copper contract on the New York Mercantile Exchange lost two cents to US$3.15 a pound.August bullion faded $2.30 to US$1,277.60 an ounce. AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email

Tags: , , , , , , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Comments