Loonie enters 2011 above parity with greenback amid higher
oil, copper, gold
TORONTO – The Canadian dollar ended 2010 above parity with the U.S. currency Friday, closing at its highest level in more than two and a half years amid rising commodity prices.
The Canadian currency rose amid higher oil prices and copper prices that hit new records for a third day.
The February crude oil contract on the New York Mercantile Exchange shook off early losses to move up $1.54 to US$91.38. Prices had fallen after data Thursday showed a much smaller than expected decline in U.S. crude inventories in the latest week.
The March copper contract on the New York Mercantile Exchange rose eight cents from Thursday’s latest record close to US$4.45 a pound. Copper has surged 33 per cent this year on higher demand from China and other emerging markets.
Gold was also higher with the February contract on the Nymex ahead $15.50 to US$1,421.40 an ounce.
The greenback fell back as strong American economic data encouraged investors to move out of the greenback and take on more risk and commodity prices advanced.
Data released Thursday showed the number of people applying for unemployment benefits fell sharply last week, a positive sign that the job market south of the border is slowly improving. There was also a stronger than expected reading on the Midwest manufacturing sector.
The American currency also lost ground against the euro after German chancellor Angela Merkel said that Europe is dealing with a major test and must strengthen the euro.
“This is not just about our money — the euro is far more than a currency,” she said.
Her comments come at the end of a year where eurozone members Greece and Ireland required financial rescues in 2010 amid a persistent government debt crisis, and Europe remains under pressure to take more action to resolve its woes.