Loonie Climbs amid Rise in U.S. Durable Goods Orders, Mixed CommoditiesTuesday, May 27, 2014 > 11:03:09
(The Globe & Mail – Malcolm Morrison)
The Canadian dollar was higher Tuesday as traders considered a heavy slate of economic data. The loonie was up 0.06 of a cent to 92.14 cents US.
The U.S. Commerce Department reported Tuesday that orders for durable manufactured goods rose 0.8% after a 3.6% gain in March and a 2.6% rise in February. But the April strength came from a big jump in demand for defence goods, including airplanes. Excluding defence, orders would have fallen 0.8% in April.
Orders for core capital goods, a category viewed as a good proxy for business investment plans, fell 1.2% in April.
Traders will also take in the latest reading on American consumer confidence later in the morning.
As far as the Canadian currency is concerned, traders are particularly interested in seeing how the economy performed in the first three months of the year. Statistics Canada releases gross domestic product data for March and the first quarter on Friday. Economists are looking for an annualized rise of 1.7% for the quarter and 0.1% for the month.
That data is of particular concern, coming out days before the Bank of Canada releases its next interest rate announcement.
Also, traders will be looking for the latest U.S. data to see if the U.S. economy actually contracted in the first quarter when the first revision to U.S. gross domestic product data is released Thursday. The initial report showed growth coming in at a paltry 0.1% as severe winter weather impacted the economy, but markets are braced for a worse reading.
Prices were mixed on commodity markets as July crude in New York declined six cents to US$104.29 a barrel. June bullion was down $15.40 to US$1,276.30 an ounce, while July copper was unchanged at US$3.17 a pound.
Markets are also keeping a wary eye on developments in Ukraine after Sunday’s presidential elections. Russia’s acceptance of billionaire businessman Petro Poroshenko as Ukrainian president had raised hopes for an easing of tensions. But hours after he was declared the victor, pro-Russian rebels escalated the Ukrainian conflict by occupying a major airport in the country’s east and Kiev retaliated with an air strike.