Canadian dollar lower amid mixed commodities, central bank worries

TORONTO – The Canadian dollar was little changed Monday morning amid mixed commodities and doubts about central bank moves to encourage economic growth and protect the euro currency.

The currency, which has risen to its highest levels since early May in the past week, was off 0.01 of a cent to 101.09 cents US.

Rising consumer confidence data from Friday helped send oil prices up for a fifth straight day with the September contract on the New York Mercantile Exchange up five cents to US$96.06 a barrel.

Copper prices gave back last week’s three-cent gain, with the September contract in New York off six cents to US$3.36 a pound.

Copper fell as hopes dimmed of further stimulus from Chinese policymakers.

A report over the weekend that property prices in July rose slightly discouraged investors hoping for further big stimulus measures from the Chinese government.

China is the world’s biggest consumer of copper, viewed as an economic bellwether as it is used in so many industries.

December bullion eased $3 to US$1,616.40 an ounce.

Commodity based currencies such as the loonie have done well recently in the wake of a commitment by European Central Bank president Mario Draghi on Aug. 2 that the ECB would do whatever it takes to keep the eurozone monetary union intact.

That has been taken to mean that the ECB could ramp up its purchases of government bonds to lower the high interest yields faced by some governments, if those countries first applied for help from the eurozone’s bailout fun.

However, Germany’s central bank, the Bundesbank, has again stressed its skepticism toward those proposed purchases, despite signs Chancellor Angela Merkel is open to the ECB’s plans. The German national central bank said in its monthly report Monday that such purchases would carry “substantial risks.”