Moody’s says Canada’s economic performance and the financial position of its federal government 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, which was 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 by 5,500 to 363,750. That was 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. This is 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, during a visit to eastern China earlier this week, was quoted by the official Xinhua news agency as saying the country has the "conditions and capabilities" to meet its 7.5 per cent economic growth target this year.
His comment helped push oil prices higher on top of a gain of almost US$1 Wednesday in the wake of data showing a much bigger than expected drawdown of American crude inventories last week.
The September contract on the New York Mercantile Exchange rose $1.27 cents to US$95.60.
The September copper added three cents to US$3.38 a pound while December bullion improved by $12.60 to US$1,619.20 an ounce.Suggest a correction