TORONTO - The Canadian dollar was modestly lower Monday morning as traders flocked to the safe haven status of the American currency after Russia occupied Ukraine's Crimean peninsula.
The resource-sensitive loonie was down 0.09 of a cent to 90.21 cents US with losses limited by sharp runups in oil and gold prices.
Russia calls the move into Crimea a necessary protection for the country’s citizens living there. There are worries that Russia might seek to expand its control by seizing other parts of eastern Ukraine.
"Risk appetite is extremely muted as we begin the start of a new week, largely predicated on continued tensions in Ukraine," said Mark Chandler, Head of Canadian FIC Strategy at RBC Dominion Securities.
Oil prices spiked almost $2 a barrel as Russia’s military advance into Ukraine raised fears of economic sanctions against a country that is one of the world’s major energy producers. Natural gas prices also moved sharply higher at the prospect of a decrease in global supplies.
The April contract in New York jumped $2.14 to US$104.73 a barrel. Natural gas was up by 11 cents to $4.72 per 1,000 cubic feet.
Traders seeking safety pushed April bullion up $31.70 to US$1,353.30 an ounce.
May copper lost two cents to US$3.16 a pound. Prices for the metal were also pressured by Chinese data as both the official and HSBC versions of the country's monthly manufacturing survey showed the sector was weaker last month than in January. The HSBC purchasing managers index fell to 48.5 from 49.5, but was above the preliminary version from last month. The official gauge dipped to an eight-month low of 50.2 for February, off from January’s 50.5.
On the economic front, U.S. consumer spending rose 0.4 per cent in January following a tiny 0.1 per cent gain in December. Income grew 0.3 per cent in January following no increase at all in December.
And the Institute for Supply Management's manufacturing index showed greater expansion in the sector, rising to 53.2 during February from 51.3 in January.
The major event for the loonie this week is the Bank of Canada's latest interest rate announcement on Wednesday. The bank is widely expected to hold off on raising its key rate from one per cent until early next year.
February employment data for Canada and the U.S. will be released on Friday. Canadian job growth is expected at around 19,000 jobs.
U.S. employment gains are expected to come in around 150,000 with results impacted by severe winter weather for a second month in a row.