MY: Canadian dollar continues to gain against USD on higher commodities
TORONTO - The loonie continued to gain traction against its U.S. counterpart as commodity prices moved higher and traders appeared optimistic U.S. data this week will show the housing market is recovering.
The Canadian dollar added 0.06 of a cent to 100.88 cents US.
April oil prices added 68 cents to US$107.74 a barrel, while gold prices added US$1.40 to US$1,657.20 per ounce. Copper prices added two cents to US$3.90.
"Risk appetite is strong, U.S. economic data is encouraging and oil remains elevated," Scotiabank said in its daily currency report.
Statistics Canada reported Monday morning that wholesale sales slipped one per cent in January to $49 billion, largely because of lower sales of motor vehicles and parts.
The agency said it was the second decrease in three months after a general upward trend that began last May.
"Canadian wholesalers in January did much worse than the street’s expectations, with sales falling by one against expectations of a slight increase," said CIBC World Markets economist Emanuella Enenajor.
"Taken together with the month’s weak manufacturing shipments figure, January is shaping up to be a soft month. Although Thursday’s retail print could point to healthy gains in that sector, we now expect January GDP to post at best a middling gain from the prior month."
In an otherwise quiet week for economic data, investors will look for January retail sales on Thursday and February's Consumer Price Index on Friday.
"Inflation is expected to nudge up slightly for both headline and core (to 2.6 per cent and 2.2 per cent), with the former pumped by gasoline prices and the latter by a tough comparison to a year ago," said Bank of Montreal's deputy chief economist Douglas Porter.
"The retail report will be skewed by the massive 15 per cent surge in auto sales at the start of the year, and flattered by higher pump prices, but ex-auto, ex-gas sales will do well to hold steady. Large-scale retail sales fell 0.5 per cent year-over-year in the month, and the warm weather likely crushed seasonal goods sales."
Traders will also take in the latest reports on U.S. housing starts and sales figures for new and existing homes.
Economists expect housing starts rose by 0.3 per cent last month, while existing home sales gained 0.7 per cent and new home sales climbed by 1.4 per cent.
