TORONTO – The Canadian dollar rose slightly against the U.S. dollar Thursday morning even as commodity prices pulled back despite positive economic data out of Canada and the U.S.
The loonie was up 0.05 of a cent at 101.25 cents US after earlier falling against the greenback.
Traders are waiting for news from budget negotiations in Washington. A deadline for reaching a deal is just days away.
The House of Representatives planned to move ahead on what Speaker John Boehner called “Plan B,” but President Barack Obama has threatened to veto it. A deal must be made by the end of the year to avoid sweeping tax increases and government spending cuts that many fear could drive the U.S. back into recession.
Analyst John Curran of Canadian Forex also noted that traditional risk currencies, like the Canadian dollar, are under pressure as traders engage in some year-end profit taking.
“Given the slow pace of movement on our beloved currency pair over the past few months don’t hold your breath for a quick pop higher,” he said, although thin holiday markets may provide a surprise.
“For those looking to clear up any pre-holiday requirements I suggest you do so before week’s end,” Curran said in a note.
February oil futures lost 27 cents to US$89.71 a barrel, while February Gold prices fell $27.70 to US$1,640 an ounce and copper prices slipped seven cents to US$3.54 a pound.
Statistics Canada said average weekly earnings of non-farm payroll employees rose to $909 in October, up 0.9 per cent from September.
On a year-over-year basis, earnings were up 2.8 per cent. That reflected a number of factors, including wage growth and changes in the composition of employment by industry as well as the average number of hours worked.
Statistics Canada also reported retail sales edged up 0.7 per cent to $39.4 billion in October, the fourth straight monthly increase. In volume terms, retail sales increased 0.3 per cent, with eight of 11 subsectors reporting gains.
The U.S. economy grew at an annual rate of 3.1 per cent over the July-September quarter as consumers spent more and state and local governments added to growth for the first time in nearly three years. But the economy is likely slowing in the current quarter.
The U.S. Commerce Department’s third and final estimate Thursday of growth for the July-September quarter was revised up from its previous estimate of a 2.7 per cent annual growth rate.
However, the number of Americans applying for unemployment benefits rose last week by 17,000, reversing four weeks of declines. The Labour Department reports that a seasonally adjusted 361,000 people sought unemployment aid the week ended Dec. 15, up from a revised 344,000 the week before.
Meanwhile, sales of previously occupied homes in the United States jumped to their highest level in three years last month, bolstered by steady job gains and record-low mortgage rates.
The National Association of Realtors said Thursday that sales rose 5.9 per cent to a seasonally adjusted annual rate of 5.04 million in November. That’s up from 4.76 million in October.