The loonie edged higher on improved investor confidence about the U.S. economy and higher oil prices.JONATHAN HAYWARD/The Canadian Press
The Canadian dollar edged closer to 98 cents (U.S.) on Thursday amid improved investor confidence about the U.S. economy and higher oil prices.
The loonie added 0.45 of a cent to 97.93 cents US Thursday — its highest close in nearly two weeks — as oil surpassed $99 a barrel.
The February oil contract was up 86 cents at $99.53 a barrel and the February gold contract fell $3 to $1,610.60 (U.S.) an ounce, while copper prices gained two cents to $3.42 a pound.
Stronger than expected retail sales from October reported Wednesday also helped keep the loonie afloat.
Meanwhile, U.S. data showed the number of people applying for unemployment benefits dropped last week to its lowest level since April 2008.
It appears that investors were more focused on that positive news than a report that showed the U.S. economy grew more slowly in the summer than previously thought because consumers spent less than the government had first estimated.
The U.S. Commerce Department says the economy grew at an annual rate of 1.8 per cent in the July-September quarter. That was the fastest growth this year, up from 1.3 per cent in the April-June quarter. But it was down slightly from last month's estimate that the economy was expanding at a 2-per-cent rate in the summer.
There was also little market impact from news that the Supreme Court of Canada shot down the federal government's attempt to create a national stock market regulator, ruling unanimously that the legislation presented to it "overreaches" into provincial jurisdiction.
While not binding, Thursday's decision likely brings to an end to Finance Minister Jim Flaherty's five-year drive to replace the fragmented regime of 13 provinces and territories that currently regulate securities, to the consternation of most stock market participants who favour the single-regulator approach.
Meanwhile, the Conference Board of Canada said early Thursday that consumer confidence has hit its lowest level in more than two and a half years. The think-tank says its Index of Consumer Confidence posted a 6.5-point drop in December, bringing 2011 to a disappointing close.
Statistics Canada reported average weekly earnings of non-farm payroll employees increased 1.4 per cent to $885.36 in October. It said average weekly earnings were up 2.7 per cent from a year earlier.
Figures earlier showing that Britain's economy grew by a slightly better-than-anticipated 0.6 per cent in the third quarter had little impact, as the previous quarter was revised down by an equivalent rate to show zero growth.