North American markets closed up with the Dow and S&P 500 setting record highs Thursday while the Canadian dollar hit a four-month peak despite a slip in the price of crude.
The Canadian dollar traded at an average of US77.48¢ compared with an average of US77.24¢ on Wednesday.
The November crude contract was down US45¢ to US$70.32 per barrel, a day after hitting a two-month high.
The increased loonie came despite some negative headlines about whether NAFTA negotiators can reach a deal by next week’s U.S. deadline and if the U.S. will impose auto tariffs regardless, says Stephen Lingard, portfolio manager at Franklin Multi-Asset Solutions.
“Over the last several weeks it has been a bit of a better tone to global growth but also a better tone to NAFTA,” he said in an interview.
“The reaction that we saw from Congress and from others in the U.S. Administration that they’d be more amendable to a trilateral deal rather than just this bilateral deal suggests that maybe the odds of a NAFTA deal coming into play are higher than they were a few months ago.”
Canada’s main stock index rose as industrials, financials and health-care sectors all closed higher, offsetting a down day for utilities and energy while materials was flat.
The S&P/TSX composite index was up 64.83 points to 16,214.75, after hitting an intraday high of 16,225.34 on 259.2 million shares traded.
Cannabis company Canopy Growth Corp. was the day’s best performer, gaining 6.5%, while New Gold led on the downside, closing off 9% cent.
In New York, the Dow Jones industrial average gained 251.22 points to close at a record high of 26,656.98. The S&P 500 index also hit a record by gaining 22.80 points to 2,930.75, while the Nasdaq composite was up 78.20 points to 8,028.23.
The U.S. greenback was less of a safe haven as it lost more ground, tech stocks bounced back and Europe closed up.
Lingard said the markets signalled investors are willing to take on more risk.
“It just feels like risk-taking overall has come back even if that’s very erratic and volatile,” he said.
He said financial sectors on both sides of the border are doing well on the expectation of higher interest rates, especially next week’s anticipated move by the Federal Reserve.
The October natural gas contract was up US6.8¢ at US$2.98 per mmBTU.
The December gold contract was up US$3 to US$1,211.30 an ounce and the December copper contract was up a little more than US1¢ to US$2.74 a pound.