Canadian dollar reaches four year high

TORONTO – The Canadian dollar was at a fresh three-and-a-half-year high above 104 cents US Wednesday amid record high gold prices.

The currency was up 0.48 of a cent to 104.23 cents US, its highest level since November, 2007.
Investors looking for a safe haven sent the June bullion contract on the Nymex up $6.80 from Tuesday’s record close to US$1,459.30 an ounce after going as high as US$1,462.10 earlier in the morning.

The May crude contract on the New York Mercantile Exchange dipped seven cents to a two-and-a-half-year high of US$108.27 a barrel amid a report from the American Petroleum Institute showing that crude inventories fell a greater than expected 2.8 million barrels last week. Analysts had forecast an increase of 1.3 million barrels.

However, inventories of gasoline rose unexpectedly by 568,000 barrels and crude supplies at the key U.S. storage facility in Cushing, Oklahoma rose 120,000 barrels, the API said.
Crude prices are still up more than 27 per cent from mid-February because of fears the fighting in Libya could spread and interrupt supplies from the big producers in the Persian Gulf, such as Saudi Arabia. Higher demand resulting from an improving global economy has also pushed prices higher.

Copper prices also advanced with the May contract in New York ahead five cents to US$4.32 a pound.

The U.S. dollar also weakened against the euro a day before the European Central Bank is expected to make its first rate hike in nearly three years to deal with inflation. A quarter percentage point increase in the main rate to 1.25 per cent is fully priced in by the markets so investors will be more interested in what the central bank’s president Jean-Claude Trichet says in his press conference.

Traders are also looking ahead to a solid Canadian employment report at the end of the week. Statistics Canada is expected to report Friday that the economy added about 30,000 jobs in March.
© 2011 The Canadian Press