TORONTO - The Canadian dollar was higher Friday as U.S. Federal Reserve chairman Ben Bernanke tried to reassure markets about economic prospects while not committing the central bank to any stimulus measures.
The loonie gained 0.39 of a cent to 101.73 cents US as Bernanke said the Fed has the tools to keep the U.S. economic recovery on track.
Bernanke didn't specify what tools the Fed could use, but markets were reassured as he said that the Fed's scheduled meeting on interest rates next month will be expanded to two days instead of just one to allow for a "fuller discussion" on what the central bank could do.
He also said the long-term strengths of the economy "do not appear to have been permanently altered by the shocks of the past four years."
There had initially been high hopes that Bernanke would unveil further stimulus measures for the economy. But those hopes faded over amid doubts over whether the previous round of quantitative easing did all that much for the economy.
And since it has already pledged low interest rates through to 2013, some analysts say the Fed has reached the limits of what a central bank can do to aid an economy that is beleaguered by problems that monetary policy can’t fix — high unemployment and massive government debt.
Oil prices turned positive with the October crude contract on the New York Mercantile Exchange up seven cents a US$85.37 a barrel.
The December bullion contract on the New York Mercantile Exchange gained $34.10 to US$1,797.30 an ounce. Bullion has been particularly volatile this week after hitting a record high close of just under US$1,900 on Monday. Profit-taking and higher margin requirements send gold tumbling about US$150 over the next two sessions.
Copper gained two cents to US$4.10 a pound.