Canadian dollar edges higher on Keystone hopes
Stocks prices stabilize after steep drop caused by worry over manufacturing outlook
The Canadian dollar closed higher Tuesday, benefiting for a second day from an improved economic outlook and hopes for rising oil exports.
The loonie gained 0.13 of a cent to 90.24 cents US.
That followed a rise of about one-third of a cent Monday amid optimism that the controversial Keystone XL pipeline will get U.S. approval. The pipeline, which would carry oilsands crude from Alberta to the Gulf of Mexico, would boost shipments from Canada and lift the economy.
The U.S. State Department said Friday that the proposed TransCanada pipeline would produce less greenhouse gas emissions compared with transporting oil by rail to refineries in Texas.
Also, the International Monetary Fund said Monday that it expects the Canadian economy will grow 2.2 per cent this year, which is up from an estimated 1.7 per cent in 2013 as the U.S. continues to import rising volumes of oil from Canada.
The Toronto stock market stabilized a day after digesting negative reports about global manufacturing performance. After falling 208.74 points, or 1.52 per cent on Monday, the S&P/TSX composite index was up 18.28 to 13,504.48 at close of trading Tuesday. US indexes were positive as the Dow Jones industrials climbed 72 points to 15,445.24, a day after giving up 208 points over worries about emerging market economies and the manufacturing outlook.
Traders looked ahead to the release of major Canadian economic data coming out later in the week. The merchandise trade balance comes out Thursday while the employment report for January is released Friday.
Economists expect Canada's trade deficit to narrow to about $500 million for December a little over half of November's level. Job creation for January is expected to come in at 15,000.
The U.S. government also releases January employment figures on Friday with economists forecasting that about 190,000 jobs were cranked out during the month.
Elsewhere on the economic front, data showed that U.S. factory orders dropped 1.5 per cent in December,. But that was better than the 1.8 per cent dip that was expected.