TORONTO - The Canadian dollar closed higher Wednesday as oil prices bounced off three-year lows.
The loonie gained 0.16 of a cent to 87.8 cents US. It had traded at a fresh, five-year low Wednesday morning after the U.S. dollar gained ground in the wake of midterm elections that left the Republicans in control of both the U.S. Senate and House of Representatives for the first time in eight years.
The resource-sensitive Canadian currency has lost well over one US cent this week alone amid a stronger U.S. dollar and tumbling oil prices.
The loonie fell almost half a U.S. cent Tuesday when crude prices hit multi-year lows after Saudi Arabia announced plans to cut oil prices to its U.S. customers.
Saudi Arabia cut the price in order to compete with a surge in oil production in the United States in a move analysts say suggests the country is more interested in keeping market share than supporting higher prices.
On Wednesday, the December crude oil contract in New York gained $1.49 to US$78.68 a barrel.
Prices had jumped almost $2 earlier in the session amid rumours of a pipeline explosion in Saudi Arabia that raised questions about whether the country’s crude production and exports could be curtailed.
Crude prices also got support after the Energy Information Administration reported U.S. crude supplies rose by a smaller than expected 500,000 barrels last week, far less than the 1.2-million rise that had been forecast.
The stronger greenback weighed on other commodities priced in U.S. dollars, particularly gold as the December contract in New York fell $22 to US$1,145.70 an ounce while the December copper contract shed one cent to US$3.01 a pound.
It was a light day on the economic calendar as traders look to employment data being released Friday in the U.S. and Canada.
Economists expect Statistics Canada to report a loss of about 8,000 jobs last month following a surge in job creation in September when the economy cranked out 74,000 jobs.
In the U.S., the forecast calls for the economy to have created about 228,000 jobs in October on top of 248,000 positions in September.
There was some positive data ahead of the jobs data. Payroll firm ADP reported that the American private sector created about 230,000 jobs last month, higher than the 220,000 figure that economists expected.