BUSINESS

Canadian dollar advances amid weakening greenback, higher commodity prices

12/30/2014 08:09 EST | Updated 03/01/2015 05:59 EST
TORONTO - The Canadian dollar closed higher Tuesday amid a generally weaker American currency and mixed commodity prices.

The loonie added 0.16 of a cent to 86.15 cents US.

February crude in New York gained 51 cents to US$54.12 a barrel ahead of the release Wednesday of the latest U.S. inventory levels from the Department of Energy. Crude prices are down 50 per cent since their 2014 high of $107.26 in June amid rising supplies and lower demand as a result of weaker economies in Europe and China.

Elsewhere on the commodity markets, February gold gained $18.50 to US$1,200.40 an ounce while March copper edged up three cents to US$2.85 a pound.

Traders also digested mixed data covering American house prices and consumer confidence.

The U.S. Case Schiller home price index rose by a greater than expected 0.76 per cent on a seasonally adjusted basis in October. Economists had looked for a rise of 0.4 per cent. The year-over-year rate eased to an almost on-consensus 4.5 per cent.

And the Conference Board's U.S. consumer confidence index came in at 92.6 in December, up from a November read of 88.7. Economists had thought confidence would improve further due to plunging gasoline prices, faster job creation and higher stock prices and expected a reading of 93.9.

Market attention was also focused on Greek politics a day after parliament failed to approve a new president, forcing the government to call early elections that could bring more economic turmoil. Investors worry elections might be won by the left-wing opposition Syriza party, which rejects Greece's bailout deal.

The credit rating agency Fitch has warned that prolonged political uncertainty in Greece could hurt the country's sovereign rating. The agency said Tuesday that it was unclear whether any single party would be able to form a government alone, a stalemate that would "increase the risks to Greece's creditworthiness."

It also cited risks of further delays to bailout negotiations and a potential drop in bank deposits.