Canadian dollar up amid improving trade numbers, European Central Bank rate cut

TORONTO – The Canadian dollar was higher Wednesday amid positive trade data and moves to stimulate the European economy.

The loonie was up 0.16 of a cent to 99.36 cents US as Statistics Canada reported that Canada’s trade balance went from a deficit of $1.2 billion in February to a surplus of $24 million in March. Economists had widely expected the balance would show a $700- million deficit.

Exports grew by 5.1 per cent to $40.5 billion in March, with energy shipments up almost four per cent.

Imports rose for a third consecutive month to reach $40.4 billion, their second-highest value on record.

Commodity prices also advanced and sentiment was positive on markets after the European Central Bank cuts its key rate to help the eurozone shake off the deep economic malaise that set in as a result of the region’s government debt crisis.

The ECB on Thursday cut the rate to 0.5 per cent from 0.75 per cent.

Economists, however, warn this cut may not have much direct effect since banks are not passing on low rates in indebted countries that need help the most.

Commodities clawed back some of the steep losses racked up Wednesday after weak readings on manufacturing raised concerns about the Chinese and American economies.

The June crude contract on the New York Mercantile Exchange rose 33 cents to US$91.36 a barrel after data showing a bigger than expected rise in U.S. oil inventories helped send oil down almost US$2.50 a barrel Wednesday

July copper gained five cents to US$3.13 a pound after tumbling 11 cents, while June gold bullion was up $12.80 to US$1,459 an ounce following a $26 slide.