December 16, 2013 - 5:47 AM
TORONTO - The Canadian dollar was higher Monday as commodity prices advanced amid European and Chinese manufacturing data.
The loonie rose 0.1 of a cent to 94.48 cents US with the greenback mixed against other currencies ahead of the U.S. Federal Reserve's meeting Wednesday when markets may find out if the central bank will start to taper its monthly US$85 billion of bond purchases.
Speculation about Fed intentions has grown considerably over the past couple of weeks in the wake of a series of strong economic data, particularly a solid employment report for last month. Also, a bipartisan committee struck a U.S. congressional budget bill, which would remove the threat of another government shutdown.
But opinion is split on what the Fed will do.
"Our U.S. analysts weigh in against the notion of a taper announcement this week," said Mark Chandler, Head of Canadian FIC Strategy at RBC Dominion Securities, adding they are looking for the Fed to start cutting back on asset purchases in March.
Oil prices rose as data showed that economic activity in the eurozone picked up in December.
The manufacturing Purchasing Managers Index beat expectations, rising to a 31-month high of 52.7 from 51.6 in November. At the same time, the services PMI slipped to a four-month low of 51 from 51.2.
Other data showed that China’s manufacturing sector grew at a slightly slower pace in December, according to a preliminary survey by HSBC. Its flash purchasing managers’ index slowed to a three-month low of 50.5.
However, the reading was still high enough to indicate that China’s economy is continuing to recover since slowing to 7.5 per cent growth in the second quarter.
The January crude contract on the New York Mercantile Exchange gained 70 cents to US$97.30 a barrel.
March copper edged up one cent to US$3.32 a pound while February gold added 40 cents to US$1,235 an ounce.
News from © The Canadian Press, 2013