Business

Winnipeg Free Press - PRINT EDITION

Commodities up, loonie reaches 31/2-month high

U.S. economic news a mixed bag

By: Malcolm Morrison

Posted: 08/17/2012 1:00 AM | Comments: 0

TORONTO -- The Canadian dollar closed at a fresh 31/2-month high Thursday amid rising commodity prices, a mixed bag of economic data and an announcement from Moody's Investor Service that Canada gets to keep its triple-A rating.

Moody's says Canada's economic performance and the federal government's financial position have held up relatively well.

The loonie ran up 0.24 of a cent to 101.35 cents US as Statistics Canada reported manufacturing shipments dropped 0.4 per cent in June.

"Some of that was offset by an upward revision to the prior month, to flat from (a drop of) 0.4 per cent originally reported," observed CIBC World Markets chief economist Avery Shenfeld.

"That left the combined two-month change not far from consensus, but well below what we were looking for."

Economists had expected a 0.3 per cent gain in shipments.

The economic news was mixed from Canada's biggest trading partner. A key measure of manufacturing in the U.S. Northeast came in worse than expected.

The Philadelphia Federal Reserve's manufacturing index registered a negative reading for a fourth month, coming in at minus 7.1, a bit better than July's reading of minus 12.9, but economists had expected a reading of minus 5.0.

The number of Americans applying for unemployment benefits rose by 2,000 to 366,000. The less volatile four-week average fell 5,500 to 363,750, the lowest level since late March.

U.S. housing starts for July came in weaker than expected at an annualized rate of 746,000, down 1.1 per cent from the previous month. But in a hopeful sign for future construction, building permits increased 6.8 per cent to a seasonally adjusted annual rate of 812,000 in July, the highest level since August 2008.

Financial markets and the Canadian dollar have rallied on optimism the world's central banks will do more to shore up the global economy.

While the European Central Bank is expected to restart its bond-buying program to keep a lid on the borrowing rates of Spain and Italy, the U.S. and Chinese monetary authorities are widely tipped to back more easing measures to boost their economies.

Chinese Premier Wen Jiabao earlier this week was quoted by the official Xinhua news agency saying the country has the "conditions and capabilities" to meet its 7.5 per cent economic growth target this year.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition August 17, 2012 B6

Factual inaccuracy? Something missing? Help improve our journalism.

Know about news? Share your story suggestions, photos and video.

Spelling error? Punctuation problem? Send us an email if you’ve found a typo.

More Business

Undock

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.