Skip to main content

The Globe and Mail

Loonie ends lower as U.S. government shutdown takes hold

Several stacks of loonie coins are seen in this file photo.

John Cowie/iStockphoto

The Canadian dollar closed slightly lower Wednesday amid no sign of a break in Washington's budget impasse, which has forced a partial shutdown of U.S. government operations and undermined confidence in the U.S. economy.

The loonie ended down 0.06 of a cent to 96.79 cents (U.S.), off early lows as prices for oil and copper turned positive.

Gold also made strong gains as the Washington standoff made the precious metal attractive as a safety investment.

Story continues below advertisement

Market reaction to the partial government shutdown, which started Tuesday, has been relatively muted on hopes that it won't last too long.

But there is growing dismay that the standoff on Capitol Hill shows no signs of easing, with some lawmakers in both parties suggesting the shutdown might last for weeks.

Adding to the grim mood was a deadline of Oct. 17 when the U.S. hits its debt limit.

On commodity markets, the November crude oil contract on the New York Mercantile Exchange up $2.06 to $104.10 a barrel.

December copper was 4 cents higher at $3.32 a pound while December bullion gained $34.60 to $1,320.70 an ounce.

On the economic front, payroll firm ADP reported that the U.S. private sector created 166,000 jobs last month, lower than the 178,000 that had been expected.

Meanwhile, there was an important sign that Italy's government would survive a confidence motion following a decision by former premier Silvio Berlusconi to back the administration. Mr. Berlusconi had earlier said his party wouldn't support Prime Minister Enrico Letta's ruling coalition.

Story continues below advertisement

And the European Central Bank kept its key interest rate at a record low 0.5 per cent, holding off on more stimulus for the economy of the 17-member euro currency union as it monitors the tentative recovery.

Report an error

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… ✨