Canadian dollar gets a boost while China’s economy slows; oil prices rise

TORONTO – A slight uptick in oil prices helped send the loonie nearly a full cent higher on Monday despite concerns about the health of China’s economy.

The Canadian dollar rose 0.87 to 88.28 cents US.

A survey published by HSBC Corp. showed Chinese manufacturing activity weakened in November, adding to signs that an economic slowdown is deepening.

HSBC said its purchasing managers’ index declined to 50.0 from the previous month’s 50.4 on a 100-point scale in which numbers below 50 show activity contracting. The bank said domestic demand was sluggish and new orders were weak.

A better outlook came from Canada’s manufacturing sector which remained steady at a 12-month high in November.

The RBC Canadian PMI remained at 55.3 last month, matching a high point set in November last year and again in October. A measure above 50.0 indicates the manufacturing sector is expanding.

Crude oil prices pulled ahead, with the January futures contract up $2.85 to US$69 on the New York Mercantile Exchange, a mild reprieve for the commodity.

Oil prices have plunged about 35 per cent from mid-summer highs because of a higher U.S. dollar, lower demand and most particularly, a glut of global supply.

Gold prices were also higher, with February bullion rising $42.60 to US$1,218.10 an ounce.

March copper rose five cents to US$2.90 a pound.