December 11, 2013 - 5:37 AM
TORONTO - The Canadian dollar gained ground for a third day Wednesday amid generally lower commodities and an improving global economy.
The loonie rose 0.39 of a cent to 94.32 cents US.
That's a good US cent higher than late last week when the currency hit lows from the summer of 2010 in the wake of the Bank of Canada's latest interest rate announcement, which left traders with the impression that rate hikes likely won't happen anytime soon.
Analysts caution that any gains in the loonie will be limited by the bank's dovish statement and also gains in the U.S. dollar as the Federal Reserve moves to start tapering its US$85 billion of monthly bond purchases.
But there are reasons for optimism at least in the short term.
"We see several developments as supporting the near-term Canadian dollar strength," said Camilla Sutton, chief currency strategist at Scotia Capital.
"The first is a shift higher in global and in particularly U.S. growth. (The dollar) is a pro-cyclical currency, typically doing well in times of accelerating global growth and depreciating when global growth shifts lower. (Also), oil prices and oil spreads between world benchmarks and Canadian priced oil have improved and domestic data has been reasonably strong, supporting the view that what is good for the U.S. economy is ultimately good for Canada."
On the commodity markets, January crude slipped 32 cents to US$98.19 a barrel.
March copper was unchanged at US$3.27 a pound while February bullion dipped $4.70 to US$1,256.40 an ounce.
News from © The Canadian Press, 2013