Skip to main content

The Globe and Mail

Loonie closes up slightly amid positive trade data, better-than-expected U.S. growth

Canadian dollar coins, or Loonies, are displayed on a map of North America on Jan. 9, 2014 in Montreal.

Paul Chiasson/The Canadian Press

The Canadian dollar closed slightly higher Thursday as Canada's current-account deficit improved slightly in the second quarter.

The loonie gained 0.07 cents (U.S.) to 92.19 cents as Statistics Canada reported that the current-account deficit edged down $200-million (Canadian) to $11.9-billion.

The decline reflected a slight increase in the deficit on trade in goods and services, which was more than offset by a lower deficit in investment income.

Story continues below advertisement

Meanwhile, other data showed the U.S. economy grew more than expected in the second quarter. The latest revision shows gross domestic product grew by 4.2 per cent, versus the original reading of 4 per cent. Economists had generally expected a dip to 3.8 per cent.

The showing was a huge improvement from the first quarter, when GDP in the U.S. contracted 2.1 per cent, largely because of severe winter weather.

Statistics Canada is expected to release the June reading on gross domestic product on Friday. Economists expect that Canadian GDP grew by 0.2 per cent in June, which would translate into annualized growth of 2.6 per cent.

And next Wednesday, the Bank of Canada releases its next decision on interest rates.

The dollar surged eight-tenths of a cent on Wednesday following the announcement that Burger King would buy Tim Hortons for $12.5-billion. The cash and stock deal will see Burger King majority shareholder 3G Capital own 51 per cent of a new company, which will be the world's third-largest fast-food restaurant company.

The loonie has been pushed higher in the past by big corporate deals. That's because a foreign buyer acquiring a Canadian company needs Canadian dollars to close the deal, boosting demand for the loonie on financial markets.

Caution was the watchword on markets after a top Ukrainian official said that two columns of tanks and military vehicles rolled into southeastern Ukraine from Russia on Thursday after Grad missiles were fired at a border post and Ukraine's overmatched border guards fled. And a senior NATO official said at least 1,000 Russian troops have poured into Ukraine with sophisticated equipment, leaving no doubt that the Russian military had invaded southeastern Ukraine.

Story continues below advertisement

Investors looking for safety pushed December bullion up $7 (U.S.) to $1,290.40 an ounce. October crude in New York moved up 67 cents to $94.55 a barrel. December copper was down 5 cents to $3.15 a pound.

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.