TORONTO – The Canadian dollar was higher Friday morning amid a general weakening in the American currency and higher oil prices.
The loonie rose 0.47 of a U.S. cent to 80.3 cents.
Oil prices advanced after plunging almost $3 a barrel on Thursday to the lowest level in a month as data continues to show large buildups of crude inventories in the United States. On Friday, the April crude contract in New York was up $1.09 to US$49.79 a barrel.
Crude prices have moved generally lower this week as the Department of Energy said U.S. crude inventories rose for a seventh straight week, leaving supplies at their highest levels in 80 years. Also depressing oil and other commodity prices lately is a steadily strengthening U.S. currency. A stronger greenback makes commodities more expensive for holders of other currencies and depresses demand.
Metal prices declined Friday with April gold down 70 cents to US$1,209.40 an ounce while May copper was down two cents to US$2.67 a pound.
The loonie looks to end this week higher amid lower expectations for another interest rate cut by the Bank of Canada.
Speculation had increased Canada’s central bank would follow up its surprise quarter point cut in January with another cut next week to support the economy against the negative effects of the collapse in oil prices.
But expectations for such a cut started to fade earlier this week following remarks from Bank of Canada governor Stephen Poloz, who said the January rate cut gives central bankers time to figure out how best to steer the country back toward stability as the effects of the plunge in crude prices ripples across the economy.
The bank makes its next interest rate announcement on Wednesday.
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