TORONTO _ The Canadian dollar was slightly higher Tuesday amid another plunge in oil prices and a surprise move by Russia's central bank to defend the ruble.
The loonie edged up 0.02 of a cent to 85.81 cents US as traders also disgested data showing Canadian manufacturing sales declined 0.6 per cent in October to $52.7 billion. It was only the second decrease in 2014. The drop reflected lower production of aerospace product and parts and a decrease in primary metal sales.
The currency had dropped two-thirds of a U.S. cent Monday, squeezed by a greenback that strengthened ahead of Wednesday's rate announcement by the U.S. Federal Reserve and falling prices for oil and metals.
The January crude contract in New York fell $1.64 to US$54.27 following a drop of almost $2 on Monday. Prices have collapsed since mid-summer, down about 50 per cent amid a huge supply/demand imbalance. Demand worries helped push oil further down Tuesday after HSBC said its manufacturing Purchasing Managers Index for China slipped 0.5 points to a seven-month low of 49.5.
China's growth fell to a five-year low of 7.3 per cent last quarter.
Also focusing financial markets Tuesday was a surprise move by Russia's Central Bank, which hiked its key interest rate to 17 per cent from 10.5 per cent in a move to prop up the ruble, which has lost half of its value this year, in large part because of Western sanctions and plunging oil prices.
It's the biggest interest rate hike since 1998, a year when Russia defaulted on its sovereign bonds.
The ruble initially appreciated, but later declined to a fresh low of 66.81 against the greenback.
Elsewhere on commodity markets, a mood of risk aversion pushed February gold up $9.80 to US$1,217.50 an ounce. March copper dipped one cent to US$2.87 a pound.