Loonie higher as US dollar loses position on political tensions in Ukraine

TORONTO – The Canadian dollar was higher again Tuesday, extending its recent gain to heights it hasn’t seen since early this year.

The loonie moved up 0.41 of a cent to 91.58 cents US. The Canadian dollar has recovered considerably since trading below 89 cents US in late March but remains below its 2014 high of about 94 cents US, according to Bank of Canada data.

Some of the Canadian currency’s perceived momentum Tuesday came from a decline in the U.S. dollar against the yen and euro.

On Monday, pro-Russian separatists seized a provincial administration building in the eastern Ukrainian city of Donetsk and proclaimed the region independent — an echo of events prior to Russia’s annexation of Crimea. Though Ukrainian authorities say they are driving them out, tensions remain.

In Canada, the latest construction figures couldn’t drum up much optimism for the domestic economy.

A report from the Canada Mortgage and Housing Corp. said that housing starts dropped to a seasonally adjusted rate of 156,823 units in March.

And Statistics Canada says the value of building permits dropped 11.6 per cent to $6.1 billion in February.

Traders have been focused on the state of the global economy, and the speed of growth in the coming months.

A report from the International Monetary Fund says threats from super-low inflation and outflows of capital from emerging economies threaten worldwide growth. The organization says it expects the global economy to grow 3.6 per cent this year and 3.9 per cent in 2015, up from three per cent last year.

Those figures are one-tenth of a percentage point below the IMF’s previous forecasts in January. However, the fund nudged its 2014 forecast for Canada upward one-tenth of a point to 2.3 per cent this year.

In commodities, the May crude contract rose 78 cents to US$101.22 a barrel, while June bullion rose $13.20 to $1,311.50 an ounce. May copper fell 0.8 of a cent to US$3.03 a pound.

Meanwhile, a solid Liberal victory and resounding defeat for the separatist Parti Quebecois in Quebec’s provincial election on Monday has cleared the possibility of any referendum in the country’s near future.