The loonie gained 0.05 of a cent to 84.6 cents US as data showed that falling oil exports in November helped push the merchandise trade deficit higher. It came in at $644 million in November, up from a revised $327 million deficit in October — compared with a small surplus initially reported.
The loonie also moved lower as the release of the minutes from last month's U.S. Federal Reserve meeting reassured investors that the central bank likely will not raise rates sooner than generally expected, which is around the middle of this year. On an upbeat note, the minutes also said that the Fed sees foreign weakness as a risk to the U.S. economy but expects the huge drop in oil prices to be positive.
Oil prices stabilized for the moment with the February crude contract in New York ahead 72 cents to US$48.65 a barrel as data from the U.S. Energy Information Administration showed that U.S. crude inventories declined by 3.1 million barrels last week. Analysts had expected supplies to increase by 380,000 barrels. Prices had tumbled $5 over the previous two days alone, adding up to a 55 per cent plunge in prices since the highs of last June.
Markets are dealing with an over abundance of supply, made worse by OPEC's refusal to cut production to support prices. But lower demand is also pressuring prices and there are worries that this reflects increasing weakness in the global economy.
Elsewhere on the commodity markets, gold prices backed off after charging ahead for the last three sessions as investors shunned riskier assets. The February contract faded $8.70 to US$1,210.70 an ounce. And March copper was a penny lower at US$2.76 a pound.
Meanwhile, two days before the release of the U.S. government's employment report for December, payroll firm ADP reported that the private sector created 241,000 jobs last month. Economists expect that a total of 240,000 jobs were created in the United States, down from 321,000 in November.
Canadian jobs data for December also comes out on Friday and analysts are looking for Statistics Canada to report that the economy turned out about 10,000 jobs after a decline of 10,700 in November.Suggest a correction