Loonie ends higher on firmer oil, metals

Tue Dec 29, 2009 4:47pm EST
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TORONTO (Reuters) - The Canadian dollar finished higher against the U.S. dollar on Tuesday, supported by firmer oil and metals prices but it underperformed other commodity-based currencies and backed off a 2-1/2-month high.

The Canadian dollar made gains against the U.S. dollar as the price of oil headed toward $79 a barrel and some key metals prices rose.

The higher-yielding Australian and New Zealand dollars rose to near two-week highs, and were up more than 1 percent during the session, before paring gains.

"Really the only interesting thing in currencies is New Zealand is up 1.5 percent and Australia is up almost 1 percent still. Besides that, it's been very very quiet and irregular trading patterns overall," said Camilla Sutton, currency strategist at Scotia Capital.

The Canadian dollar closed at C$1.0438 to the U.S. dollar, or 95.80 U.S. cents, up from C$1.0499 to the U.S. dollar, or 95.25 U.S. cents, at Thursday's close. Canadian markets were closed on Friday and Monday.

At one point on Tuesday, the Canadian dollar rose as high as 96.47 U.S. cents.

Merger and acquisition activity also helped boost the Canadian dollar. A C$679-million bid for metals explorer Corriente Resources Inc by China's CRCC-Tongguan Investment Co Ltd helped lifted the share prices of several Canadian miners.

The Canadian dollar was relatively steady after the Standard & Poor's/Case-Shiller index showed U.S. home prices were flat in October and government data showed U.S. consumer confidence rose to a three-month high in December.

No Canadian economic data is on tap this week. Trading in this holiday-shortened week is expected to be thin, which could prompt the currency to make exaggerated and choppy moves.   Continued...