LE: Canadian dollar up amid strong manufacturing data, relief over Ukraine sanctions
TORONTO – The Canadian dollar was higher Tuesday while traders took in a strong manufacturing report and awaited a speech later in the day by Bank of Canada governor Stephen Poloz.
The loonie rose 0.09 of a cent to 90.56 cents US as Statistics Canada said that manufacturing sales rose 1.5 per cent to $50.4 billion in January, the largest gain since February 2013. That was about double the increase that economists expected.
The topic for Poloz’s speech in Halifax is “Redefining the Limits of Growth.”
“Recent commentary from Governor Poloz has been relatively balanced, appearing to shift to a more neutral (less dovish tone),” said Camilla Sutton, chief FX Strategist at Scotiabank.
His remarks will be followed by a news conference.
Markets also monitored the latest developments in the Ukraine crisis.
Two days after residents in Ukraine’s Crimea region voted to secede, Russian president Vladimir Putin signed a bill formally annexing the territory. Putin also the country’s parliament that Russia doesn’t want more of Ukraine.
At the same time, there was relief on markets that sanctions levied against Russia for its role in the Crimea referendum are targeted specifically against individuals as opposed to wider measures that might disrupt Russian economic activity.
Western governments, including Canada, have imposed travel bans and asset freezes on people from Russia, Crimea and Ukraine seen as playing key roles in organizing what they consider an unlawful vote.
That relief has been reflected in gold prices, which fell for a second day. The April contract on the New York Mercantile Exchange fell $19 to US$1,353.90 an ounce.
Other commodities were mixed with May copper down a cent to US$2.94 a pound while April crude gained 33 cents to US$98.41 a barrel.
Traders also looked to the start of a two-day interest rate meeting of the U.S. Federal Reserve.
Data out Monday showing U.S. factory production in February rose at its fastest rate in six months reinforced expectations the Fed will go ahead with a third planned reduction of its stimulus, cutting monthly bond purchases by US$10 billion to $55 billion.
