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Canadian dollar rises after surprise improvement in domestic economy

Canadian dollar coins, or Loonies, are displayed on a map of North America January 9, 2014 in Montreal. THE CANADIAN PRESS/Paul Chiasson
March 31, 2014 - 6:11 AM

TORONTO - The loonie moved higher on early Monday motivated by a surprisingly strong improvement in the economy during the first month of the year.

The Canadian dollar gained 0.41 of a cent to 90.83 before stock markets opened.

Statistics Canada said the economy grew by 0.5 per cent in January, above the 0.3 per cent prediction from economists.

The increase marked an improvement from December when there was a 0.5 per cent decline in the economy.

Meanwhile, expectations in China and Japan are focused on whether officials will take new steps to spur economic growth.

Investors in Japan anticipated the government or the central bank would announce measures to offset the impact of a sales tax hike. Japan's sales tax will increase to eight per cent from five per cent on Tuesday, a move needed to help stabilize government finances but also a possible setback to economic recovery.

Investors also increasingly expect that China's government will take measures to prevent a slowdown in the world's No. 2 economy, after manufacturing touched an eight month low according to data released last week.

In commodities, the May crude oil contract dipped 14 cents to $101.53, while gold bullion lost $1.80 to $1,292.50 for June.

Copper slid 1.2 cents to US$3.03 a pound.

News from © The Canadian Press, 2014
The Canadian Press

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