TORONTO - The Canadian dollar advanced Thursday amid rising commodity prices while traders looked ahead to the latest snapshot of economic growth.
The loonie rose 0.37 of a cent to 95.8 cents US a day before the release of Canadian gross domestic product data for April. Economists believe the economy grew 0.1 per cent month over month and at an annualized rate of 1.4 per cent, which is slower than the U.S.
Data released Wednesday showed the U.S. economy grew at only a 1.8 per cent annualized rate in the first quarter, instead of the previous estimate of 2.4 per cent.
The slower than expected growth raised hopes that the U.S. Federal Reserve is in no hurry to cut back a key stimulus program, the monthly purchase of US$85 billion of bonds aimed at keeping long-term rates low.
The mood on markets was improved Thursday as interbank lending rates in China continued to ease after a pledge earlier in the week by authorities to shore up banks facing cash shortfalls.
Fears of a credit crisis in the world’s second-biggest economy had contributed to a selloff in global markets that ended when policymakers in China softened their stance with the promise to provide "liquidity support" if needed.
Commodity prices improved Thursday with the August crude contract on the New York Mercantile Exchange up 31 cents to US$95.81 a barrel.
Gold prices stabilized with the August contract on the Nymex ahead $6.50 to US$1,236.30 an ounce. Gold prices have deteriorated steadily this year as the precious metal loses its appeal as a hedge against inflation and deteriorating currencies.
July copper shed early gains and was unchanged at US$3.04 a pound.