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Canadian dollar closes higher, gold rises in best one-day move since June, 2012

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(Globalpost/GlobalPost)

TORONTO - The Canadian dollar closed higher Monday amid general U.S. dollar weakness and surging gold prices.

The loonie climbed 0.21 of a cent to 96.67 cents US.

A lower dollar helped support metal prices because a weaker greenback makes it less expensive for holders of other currencies to buy oil and metals which are dollar-denominated.

August bullion ran up $43.10 to US$1,336 an ounce, climbing above $1,300 for first time in a month. It was the biggest one-day gain since June 2012.

Prices were close to US$1,500 an ounce in early May but started to drop later that month after Federal Reserve Chairman Ben Bernanke said that the central bank could start tapering its monthly US$85 billion of bond purchases if economic conditions warrant. But prices started to revive after Bernanke said last week that the economy still needs stimulus.

September copper was up five cents to US$3.19 a pound.

The September crude contract on the New York Mercantile Exchange shed early gains and moved down 93 cents to US$106.94 a barrel.

But prices have jumped about 12 per cent this month, underpinned by three weeks of declining U.S. stockpiles.

It is a relatively quiet week for economic news.

The major Canadian data point for the week is May retail sales, which comes out Tuesday morning. The consensus calls for a 0.3 per cent rise following a 0.1 per cent rise in April.

In the U.S., data out Monday morning showed that existing home sales fell by 1.2 per cent in June to a seasonally adjusted annual rate of 5.08 million but remain near a 3 1/2 year high. Economists had expected a rise of 1.4 per cent.

In other market-related developments, Japanese election results gave the country’s ruling coalition a majority in parliament’s upper house and a mandate to push ahead economic reforms.

Preliminary results from Sunday’s election show the coalition led by Shinzo Abe won a majority in the upper house. Analysts said the victory removes a roadblock to implementing its economic reform agenda.

Portuguese financial markets were relieved by the decision to allow the fragile coalition government to remain in charge, eliminating for now the prospect of snap elections and more political uncertainty.

The interest rate on the benchmark 10-year bond — what the government would pay to borrow money from the open market — fell 0.45 percentage points to 6.29 per cent.

A survey by the National Association for Business Economics says U.S. companies are increasingly confident the economy will grow at a modest pace over the next year and are hiring more.

Nearly one-third of the economists surveyed said their companies added jobs in the April-June quarter. That’s the highest percentage in nearly two years. And 39 per cent expect their firms will hire more in the next six months.

http://www.globalpost.com/dispatch/news/the-canadian-press/130722/canadian-dollar-advances-amid-broadly-lower-greenback-rising