The Canadian dollar surged to its highest close in almost a year against the U.S. currency on Tuesday after Statistics Canada said manufacturing shipments rose strongly in March, up 2.8 per cent to $50.1 billion.
The loonie was up 0.68 of a cent to 91.01 cents US, the highest close since June 2006.
"I think for the most part on balance the data that we've seen out of Canada for the last 3 or 4 months now has tended to be on the stronger side of expectations so I think today's data just reaffirms that trend that we've seen,'' George Davis, chief technical analyst at RBC Capital Markets, told the Canadian Press.
Davis added the loonie also benefited from a U.S. dollar that weakened during the morning after the April CPI date came out.
The dollar has in fact risen 7 per cent over the last two months -- similar to its rise in early 2006 when it was driven up by a combination of factors including rate hike expectations, strong commodity prices, corporate acquisition flows and weakness of the U.S. dollar.
The Toronto stock market also finished on a positive note on Tuesday, although a long way off the highs of the session as energy stocks turned negative, tech losses piled up and gains in the mining sector narrowed.
New York indexes closed mixed after a lower-than-expected reading on April inflation raised hopes for an interest-rate cut. But investors were disappointed with earnings from two big American retailers and another reminder of how the housing sector is contracting.
Toronto's S&P/TSX composite index closed up 31.36 points to 13,934.64. That's after pulling back 100 points Monday from its record close above 14,000 points on Friday, which had left the TSX with a year-to-date gain of 8.5 per cent.
"The market has gone high too quickly and it is poised for some profit-taking,'' said Vincent Delisle, portfolio manager at Scotiabank in Montreal.
"We see 14,000 as being a point of resistance. It was and still is our target for the year.''
The TSX Venture Exchange declined 37.02 points to 3,272.63.
With a report from the Canadian Press
