Skip to main content

The Globe and Mail

Canadian dollar moves lower amid uncertainty over fiscal cliff talks

Canadian dollars.

Jeff McIntosh/THE CANADIAN PRESS

The Canadian dollar closed lower Thursday with sentiment whipsawed on varying assessments on how U.S. negotiations are going in clinching a deal that would avert the so-called fiscal cliff.

That's the term used for the looming imposition of big spending cuts and tax hikes next year under U.S. law if politicians don't negotiate an alternative. The U.S. economy would likely fall back into recession if the fiscal cliff can't be avoided.

The loonie was down 0.09 of a cent at $1.0073 (U.S.) following a gain of about one-third of a U.S. cent on Wednesday.

Story continues below advertisement

House Speaker John Boehner expressed disappointment with the pace of talks with the White House to avoid going over the fiscal cliff.

Following a Thursday meeting with Treasury Secretary Tim Geithner, Mr. Boehner said Republicans have put concessions on the table, but President Barack Obama still has to outline the spending cuts he's willing to make.

"We have a debt crisis, it's the spending that is out of control," Mr. Boehner told reporters following the meeting.

Shortly after, Senate Majority Leader Harry Reid chimed in, saying Mr. Obama is still waiting for a serious offer from Republicans.

"We need Republicans to come forward with something," he said.

Every day seems to bring a new assessment of where negotiations stand. Traders were reassured Wednesday after Mr. Boehner said he was optimistic that a deal can be reached with Mr. Obama.

Meanwhile, traders also took in better-than-expected Canadian trade data and an upward revision of third-quarter U.S. economic growth.

Story continues below advertisement

Statistics Canada reported the country's current account deficit increased $500-million (Canadian) to $18.9-billion in the third quarter. The agency said the deficit grew as exports declined at a faster pace than imports fell.

And the U.S. economy grew at an annual rate of 2.7 per cent in the third quarter, higher than the original reading of 2 per cent.

Commodity prices were also higher as January crude on the New York Mercantile Exchange rose $1.58 to $88.07 a barrel.

March copper gained 7 cents to $3.61 while February bullion was ahead $10.70 to $1,727.20 an ounce.

Report an error
Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.