By Malcolm Morrison, The Canadian Press
TORONTO - The Canadian dollar closed higher Thursday after the latest trade figures showed Canada’s merchandise trade deficit narrowed in January.
The currency rose 0.19 of a cent to 97.14 cents US as Statistics Canada said the trade deficit with the world narrowed to $237 million in January from $332 million in December.
Exports rose 2.1 per cent to $39.1 billion while imports decreased 1.9 per cent to $39.3 billion.
Meanwhile, the U.S. trade deficit widened in January, reflecting a big jump in oil imports and a drop in exports.
The U.S. Commerce Department says the deficit rose to US$44.4 billion, an increase of 16.5 per cent from December. U.S. exports dropped 1.2 per cent to $184.5 billion while imports rose 1.8 per cent to $228.9 billion as oil imports surged 12.3 per cent.
Even with the wider U.S. trade deficit in January, economists say they think it will narrow slightly this year, in part because of continued gains in U.S. energy exports.
Commodity prices were higher with the April crude contract on the New York Mercantile Exchange up $1.13 to US$91.56 a barrel.
May copper rose three cents to US$3.52 a pound while April bullion added 20 cents to US$1,575.10 an ounce.
Traders also looked ahead to Friday's release of Canadian job creation figures for February, with economists predicting that 7,500 jobs were created last month.
The U.S. non-farm payrolls report for February also comes out Friday. Expectations for job creation were ratcheted up after payroll firm ADP said Wednesday that the private sector created 198,000 jobs last month.
Optimism rose further Thursday after the Labour Department said that the number of Americans seeking unemployment aid fell by 7,000 last week, driving the four-week average to the lowest point in five years.
Overseas, the European Central Bank left its benchmark interest rate unchanged at a record low of 0.75 per cent, holding off on further stimulus even though the euro area remains stuck in recession.
And the Bank of England opted against injecting more money into the ailing British economy, which has one foot in a recession. The Bank’s main policymaking body decided to maintain its asset purchase program at 375 billion pounds.
A number of economists were expecting another 25 billion pounds infusion. Last month, Governor Mervyn King had pushed for such an increase in monetary stimulus.
The Bank also kept its main interest rate at the record low of 0.5 per cent.
On Wednesday, the loonie fell 0.33 of a cent after the Bank of Canada kept its key rate unchanged at one per cent and indicated that persistent economic weakness and low inflation means a hike is a long ways off.