Canadian dollar pushes higher on commodities

Mon May 5, 2008 5:31pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By John McCrank

TORONTO (Reuters) - The Canadian dollar pushed higher against a broadly weaker U.S. dollar on Monday, boosted by robust commodity prices, while domestic bond prices ended lower.

The Canadian currency closed at C$1.0135 to the U.S. dollar, or 98.67 U.S. cents, up from C$1.0193 to the U.S. dollar, or 98.11 U.S. cents, at Friday's close.

The currency was helped by a record price for oil, at $120.36 a barrel. Record high copper prices HGN8, and stronger gold prices were also seen helping. Canada is a major producer of commodities the currency is often influenced by price movements.

A big chunk of the Canadian dollar's gains can be attributed to a broadly weaker greenback, said Eric Lascelles, chief economics and rates specialist at TD Securities.

High commodity prices are often a recipe for U.S. dollar weakness, but concerns about the state of the U.S. economy may be the real driving force, he said.

"You're seeing an unwind of the trend we've been seeing recently. You look at the recent movement in the U.S. dollar and it had been very much stronger ... but I think a lot of sober reflection over the weekend is prompting people to unwind some of those moves."

Canadian data due this week includes March building permits and the Ivey Purchasing Managers Index for April on Tuesday. April housing starts will be released on Thursday with the April employment report on Friday.

BONDS FALL   Continued...