BUSINESS

Loonie moves up half a cent following release of consumer confidence data

06/26/2012 09:25 EDT | Updated 08/26/2012 05:12 EDT
TORONTO - The Canadian dollar moved ahead half a cent Tuesday after reports from both sides of the border showed consumer confidence still hasn't gained traction.

The loonie rose to 97.66 cents US as the greenback fell compared to other currencies amid weak consumer outlook data.

The shift followed the release of a survey from the Conference Board of Canada that showed consumer confidence fell sharply — by 6.8 points to 74 — in early June, back to where it was in January.

In the U.S., the story was much the same with lower consumer confidence in June, the fourth consecutive monthly decline, as lingering worries about the economy outweighed relief at the gas pump.

The Conference Board said its U.S. consumer confidence index stood at 62, down from 64.4 in May and lower than the 63.2 analysts had been expecting. The index remains well below the 90 reading that indicates a healthy economy — a level it hasn't been near since the recession began in December 2007. But it's far from the all-time low of 25.3 reached in February 2009.

The U.S. dollar fell slightly compared to other currencies as investors waited for more clarity on the debt crisis in Europe.

The gain comes even though investors are worried about Spain's ability to repay its debt and Greece's new coalition government suffered a setback when a second Cabinet member resigned.

In commodities, the August crude contract on the New York Mercantile Exchange gained 15 cents to end at US$79.36 a barrel.

August gold closed down $13.50 to US$1,574.90 an ounce. July copper was down less than a cent to US$3.31 a pound.

Encouraging new data gave signs that the U.S. housing market is slowly improving. Standard & Poor's/Case-Shiller home price index for April showed increases in 19 of the 20 U.S. cities tracked. And a measure of national home prices rose 1.3 per cent compared with March, the first increase in seven months.

Meanwhile, concerns over the ability of Europe's leaders to agree on a package of measures to deal with their debt crisis kept stock markets in check Tuesday, a day after Cyprus became the fifth euro country to ask for financial assistance from its partners in the currency zone.