10/16/2013 08:44 EDT | Updated 01/23/2014 06:58 EST

Canadian dollar closes higher as U.S. Senate leaders reach debt deal

TORONTO - The Canadian dollar closed higher Wednesday after American lawmakers reached a deal to raise the debt limit and reopen a partially shut down U.S. government.

The loonie gained 0.43 of a cent to 96.77 cents US.

The agreement Senate Majority leader Harry Reid hammered out with Senate GOP leader Mitch McConnell would see the U.S. Treasury have authority to continue borrowing through Feb. 7 and for the government to reopen through Jan. 15.

The deal was reached just hours before an Oct. 17 deadline when the U.S. government would lose its ability to borrow and would be required to meet its obligations by relying on cash in hand and incoming tax receipts.

The Senate and the House of Representatives are to vote on the measure late Wednesday. That, in turn, would allow President Barack Obama to sign the bill into law ahead of the Thursday deadline that Treasury Secretary Jacob Lew had set for action to raise the $16.7-trillion debt limit.

On the economic front, data showed a drop in manufacturing shipments.

Statistics Canada reported manufacturing sales edged down 0.2 per cent to $49.5 billion in August, following three months of gains. The showing was essentially in line with economists’ forecasts.

Commodities were mixed with the November crude contract on the New York Mercantile Exchange shaking off early losses to move up $1.08 to US$102.29 a barrel.

December copper on the Nymex was unchanged at US$3.31 a pound while December gold bullion in New York rose $9.10 to US$1,282.30 an ounce.