Canadian dollar sharply higher on improved factory output

The Canadian dollar rose sharply on Friday, ending above 88 cents US on the strength of data showed manufacturing shipments increased in September.

After falling nearly half a cent on Thursday because of plunging oil prices, the loonie was up 0.78 of a cent to 88.68 cents US.

Crude oil was trading below $75 on Thursday, hurting the oil-sensitive Canadian dollar, but it bounced upward on Friday morning, helping to stabilize the dollar.

An imbalance between supply and demand has helped drive crude prices down by about 30 per cent from the highs of the summer, a time when Iraqi oil supplies were threatened by advances by Islamic State insurgents. Today, the International Energy Agency predicted the slide would continue.

But signs of a revival in the manufacturing sector were the main stimulus for the currency.

Statistics Canada reported Friday that manufacturing shipments rose by 2.1 per cent to $53 billion in September.

That was better than the 1.1 per cent gain expected by economists, but doesn’t quite reverse the 3.5 per cent fall in August.

Most of the increase in September stemmed from higher sales in the transportation equipment, including a boost in sales of autos and auto parts...

Food and primary metals shipments also increased.

Ontario and Quebec were the big beneficiaries, bolstering this week’s EDC report that exports are on the rebound.

This has been excerpted from 14 November 2014 article by CBC News.