Dollar closes at parity

The Canadian dollar closed exactly at parity Wednesday, the first time since April 23 it's finished the trading day worth the same or more than the U.S. greenback.

The dollar's official Bank of Canada close was 1.0000 US, up 0.73 of a cent. The loonie has see-sawed around par since Oct. 14 but hadn't closed above that level.

North American markets were otherwise subdued a day ahead of the G20 leaders summit in Seoul to discuss world trade imbalances.

Investors also worried about a possible return of European government debt problems.

Toronto's S&P/TSX composite index closed up 26 points, or 0.2 per cent, to 12,942.6.

China's latest trade surplus underscored the problem of growing trade imbalances.

On Wednesday, it reported that its exports outstripped imports by a larger-than-expected $27.1 billion US in October.

With the trade surplus flooding cash into the world's fastest-growing major economy, the Chinese central bank ordered banks to set aside more reserves in a new move to curb lending and head off rising inflation.

A surging Chinese economy has been of particular benefit to commodity prices and the resource-heavy Toronto stock market.

"There is no doubt that China is on its way to further tightening," Danny Yan, Hong Kong-based fund manager at Taifook Asset Management, told Bloomberg.

"The whole world is flooded with capital that has nowhere to go."

In New York, the Dow Jones industrial average was up 10.3 points, or 0.09 per cent, to 11,357.04. The Standard & Poor's 500 index rose 5.3 points, or 0.4 per cent, to 1,218.7. The Nasdaq composite index was up 15.8 points, or 0.6 per cent, to 2,578.8.

The December gold contract ended the day at $1,399.30 US an ounce, down $10.80.

Sharp drop in claims

The December crude contract on the New York Mercantile Exchange finished up $1.09 at $87.81 US after closing Tuesday at a two-year high.

The lacklustre showing on American markets came despite data showing an unexpectedly sharp drop in first-time claims for U.S. unemployment benefits last week.

Normally an upbeat jobs report would be enough to send stocks higher, but enthusiasm was kept in check ahead of the G20 summit, which takes place Thursday and Friday.

The meeting comes as countries like the U.S. and Japan try to weaken their currencies to stimulate economic growth.

New York markets also declined after China's leading credit rating agency lowered its view on the U.S. in the wake of the Federal Reserve's decision to pump another $600 billion US into the U.S. economy.

China's credit rating agency Dagong downgraded the long-term sovereign rating of the U.S. for the second time in six months. China is a leading holder of U.S. debt.

Major European indexes all slid as worries grow about debt problems in Ireland. Countries like Ireland and Greece are facing rising debt with little signs of growth.

Britain's FTSE 100 and Germany's DAX index closed down one per cent, and France's CAC-40 fell 1.5 per cent.