TORONTO – Rising commodity prices allowed the Toronto Stock Exchange’s flagship index to close higher and the Canadian dollar to rise on Wednesday, even as U.S. inflation peaked level in nearly four decades.
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Crude oil, natural gas, gold, copper and lumber prices all posted solid gains on Wednesday, in part due to a weakening in the US greenback due to the release of data showing evidence of a 7% annual rise in consumer prices in the United States last month.
Although this is a high number, inflation was as expected and is unlikely to translate into rapid interest rate action from the US Federal Reserve.
“The fact that the US dollar plunged after the inflation numbers … was definitely positive for commodities,” said Michael Currie, vice president and investment advisor at TD Wealth Management.
The Materials and Energy sectors were the two main contributors to the TSX’s rally, posting a second straight session in a row after several days of weakness at the start of the year.
Toronto’s S & P / TSX Composite Index climbed 120.19 points to end the session with 21,395.00 points.
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The materials sector climbed 2.3%, while the energy sector advanced 1.4%. The finance group gained 0.5% and the information technology group 0.1%.
The most significant decline was in the health sector, which returned 2.4%.
In New York, the Dow Jones Industrial Average rose 38.30 points to 36,290.32 points. The broader S&P 500 index gained 13.28 points to 4,726.35 points, while the Nasdaq Composite Index gained 34.94 points to 15,188.39 points.
On the New York Commodity Exchange, the price of crude oil rose US $ 1.42 to US $ 82.64 per barrel, while that of natural gas rose 60.8 cents to US $ 4. US $ 86 per million BTUs.
The price of gold advanced US $ 8.80 to US $ 1,827.30 an ounce and copper jumped 14.75 US cents to end the day near US $ 4.58 per pound.
In the currency market, the Canadian dollar traded at an average rate of 79.94 US cents, up from 79.33 US cents the previous day.
The Canadian Press