The Canadian Press - ONLINE EDITION

Market optimism over Keystone XL pipeline sends Canadian dollar higher

  • Print

TORONTO - The Canadian dollar closed higher Monday amid optimism that the controversial Keystone XL pipeline will get U.S. approval.

The loonie closed off session highs but still rose 0.33 of a cent to 90.11 cents US since the pipeline would boost shipments from the oilsands and give a lift to the Canadian economy.

The loonie went as high as 90.6 cents US before U.S. Treasury yields strengthened during the day as traders increasingly looked for safe havens, generally avoiding commodity based currencies, oil and metals, and equities.

The benchmark U.S. 10-year Treasury dropped about seven basis points to 2.587 per cent late in the afternoon.

The U.S. State Department said Friday that the proposed TransCanada (TSX:TRP) pipeline would produce less greenhouse gas emissions compared with transporting oil to the Gulf of Mexico by rail.

"This is likely to sway Secretary of State (John) Kerry to provide a favourable recommendation to President (Barack) Obama on the construction of the pipeline, which will provide added capacity for Canadian oil to flow into the U.S.," observed Camilla Sutton, chief FX strategist for Scotiabank.

There was also a positive outlook from the International Monetary Fund, which said it expects the Canadian economy will grow 2.2 per cent this year, up from an estimated 1.7 per cent in 2013.

Meanwhile, emerging market worries weighed on financial markets as data showing a slowdown in Chinese manufacturing added to concerns about countries such as Turkey, South Africa and India, all of which had to hike rates last week to support their currencies.

These countries and others have been hit by an outflow of investor funds as the U.S. Federal Reserve cuts back on its massive monthly bond purchases, a move that kept long-term rates low and resulted in a flow of cheap money into those markets.

But the primary worry is that weaker growth in those countries could drag down developed markets.

China's official purchasing managers' index showed the manufacturing sector came in at 51.5, down from 52.5 in December. Any reading above 50 signals expansion.

Sentiment was also hurt by disappointing American data. The U.S. Institute for Supply Management said its January manufacturing index dropped to 51.3 during January from 56.5 in December.

In Canada, Royal Bank's purchasing managers manufacturing index for January came in at 51.7, down from 53.5 in December.

On the commodity markets, March crude oil in New York dipped $1.06 to US$96.43 a barrel.

March copper was down a cent to US$3.19 a pound while April gold gained $20.10 to US$1,259.90 an ounce.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

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.

letters

Make text: Larger | Smaller

LATEST VIDEO

Spring fashion trends

View more like this

Photo Store Gallery

  • Goslings with some size head for cover Wednesday afternoon on Commerce Drive in Tuxedo Business Park - See Bryksa 30 Goose Challenge- Day 12- May 16, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • A squirrel enjoys the morning sunshine next to the duck pond in Assiniboine Park Wednesday– June 27, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

What are you most looking forward to this Easter weekend?

View Results

View Related Story

Ads by Google