BUSINESS

Canadian currency loses ground amid mixed commodity prices, U.S. consumer data

03/27/2012 08:52 EDT | Updated 05/27/2012 05:12 EDT
TORONTO - The Canadian dollar closed lower against the U.S. currency Tuesday amid weaker prices for copper and gold and soft U.S. economic data.

The commodity-sensitive loonie was down 0.38 of a cent to 100.51 cents US following a jump of more than three-quarters of a cent on Monday.

The greenback had lost ground Monday after U.S. Federal Reserve chairman Ben Bernanke said that the U.S. job market was still weak despite three months of job gains in excess of 200,000.

Bernanke's comments were a strong indication that the U.S. central bank is prepared to keep its low-interest rate policies in place for some time to come despite the recent signs of economic growth.

Traders also interpreted his remarks to suggest that the Fed could launch another round of buying bonds, a measure known as quantitative easing.

The weaker greenback also sent commodity prices higher on Monday and on Tuesday the May crude contract on the New York Mercantile Exchange gained 30 cents to US$107.33 a barrel.

A weaker American currency usually helps raise commodity prices, which are denominated in U.S. dollars, as it makes oil and metals less expensive for holders of other currencies.

Copper prices declined one cent to US$3.88 a pound after jumping eight cents Monday. Bullion prices also backed away from Monday's $23 rise, down 70 cents to US$1,684.90 an ounce.

On the economic front, the U.S. Conference Board reported that its index on consumer confidence edged down to 70.2 in March — from an upwardly revised 71.6 in February — which was in line with expectations.

Other data which showed that U.S. home prices fell in January for a fifth straight month in most major U.S. cities, as modest sales increases have yet to boost prices.

The Standard & Poor's/Case-Shiller home-price index shows prices dropped 0.8 per cent in January from December in 16 of 19 cities tracked.