TORONTO – The Canadian dollar was higher Monday as risk appetite was improved by further reforms by the Chinese government. The loonie was ahead 0.27 of a cent to 95.99 cents US as the greenback moved lower amid uncertainty as to when the Federal Reserve might start letting up on its monthly US$85 billion of bond purchases. Markets found support Monday from China’s announcements of more details to its economic and social reform program, including opening state industries to greater competition, loosening its one child policy, and abolishing its labour camps. China’s leadership has faced pressure to replace a worn out economic model after growth slowed to a two-decade low in the second quarter. Meanwhile, China is studying new ways to measure its economy. The country’s statistics bureau says new indicators would be added, such as farmer income from the sale of land use rights and revisions in the way it calculates the contribution from housing, the nation’s statistics bureau said Monday. The proposed revision could boost the size of the nation’s estimate of its gross domestic product, which rose 7.7 per cent over the first nine months of the year from a year earlier. The focus on the Fed will pick up mid-week with the release Wednesday of the minutes from the Fed meeting late last month when the central bank judged the American economy still too weak to start tapering its asset purchases. But the meeting did nothing to lessen the uncertainty surrounding when the Fed might move, particularly as its sounded more positive about the economy. Last week, Janet Yellen, who is slated to become the next Fed chairman, made it clear during confirmation hearings that she supports the Fed’s low interest-rate policies. Those bond purchases have kept bond yields low and encouraged people to buy into equities, resulting in a big stock boom on many markets this year. It’s a relatively soft week for economic data but traders will take in the latest retail and inflation data coming out near the end of the week. Economists reckon that retail sales rose by 0.2 per cent in October following a 0.2 per cent gain in September. Traders will also likely take in data showing very little price pressure in the Canadian economy. The consensus calls for the consumer price index to come in unchanged for October after rising by 0.2 per cent in September. Statistics Canada releases both reports on Friday. In the U.S., investors will look to the release of the latest data on retail sales, inflation and existing home sales on Wednesday. Traders will also look to Thursday, when the leading indicator comes out. This report tells investors how the economy should be performing in the next six months. Commodity prices were mainly lower with the December crude contract on the New York Mercantile Exchange down 49 cents to US$93.35 a barrel. December copper was unchanged at US$3.17 a pound while December bullion faded $6.90 to US$1,280.50 an ounce.

Source