Source: The Canadian Press

The Toronto stock market headed for a slightly higher open Friday morning as commodity prices rose and investors took in the latest moves by China to cool inflation.

The Canadian dollar moved higher against its U.S. counterpart, rising 0.14 of a cent to 99.1 cents US.

U.S. futures edged higher ahead of consumer confidence data coming down later in the morning. The Dow Jones futures gained 25 points to 11,322, the Nasdaq futures were up 4.25 points to 2,204 and the S&P 500 futures rose 4.1 points to 1,232.

People’s Bank of China told commercial lenders Friday to increase minimum reserves by 0.5% of deposits as Beijing tries to rein in a flood of money flowing through the economy from stimulus spending and bank lending.

Beijing has announced a slew of measures in recent weeks to cool inflation that rose to a 25-month high of 4.4% in October, well above the government’s 3% target.

Fresh economic data raised expectations that China will following through with a hike in interest rates.

China’s exports jumped 34.9% in November from the year-ago period, up from a reading of 22.9% growth in October and surpassing the 22.4% increase expected by economists.

Imports also greatly exceeded expectations, rising 37.7% on top of a 25.3% gain in October.

Chinese business newspapers have reported that an increase might be announced as early as this weekend.

“A rate hike still cannot be ruled out this weekend,” said Mark Williams, an analyst for Capital Economics, in a report.

Signs of healthy Chinese demand helped send oil and copper prices higher.

The January crude contract on the New York Mercantile Exchange gained 31 cents to US$88.68 a barrel.

The March copper contract on the Nymex was up five cents to US$4.13 a pound while the February bullion contract in New York declined $3.40 to US$1,389.40 an ounce.

Moves by China to rein in its hot economy during this year have usually had a negative effect on the Toronto stock market. That’s because strong demand from China has helped push the resource heavy TSX up about 13% this year, led by gains in commodity stocks amid higher prices for oil and metals.

Economic growth in China is expected to remain robust, around 9% over the next couple years, even with rate hikes.

In overseas trading, Japan’s Nikkei 225 stock average closed down 0.7%, South Korea’s Kospi slipped 0.1% and Hong Kong’s Hang Seng index dropped less than 0.1%.

London’s FTSE 100 index added 0.09%, Frankfurt’s DAX gained 0.67% while the Paris CAC 40 was ahead 0.17%.

In Europe, the focus was on the debt crisis, which eased from last week’s panic but remained a lingering threat. German and French leaders will meet today to discuss what the EU can do to contain the market turmoil that threatens to raise indebted countries’ borrowing costs to unsustainable levels.

In corporate news, BCE Inc. (TSX:BCE) said it is boosting its annual dividend by 7.7%, increasing the payout to $1.97 a share for 2011. Canada’s largest telecommunications company also said Friday it would contribute $750 million towards payment of its future defined benefit pension plan obligations. It said the contribution will eliminate its pension plan deficit in 2014.

Garda World Security Corp. (TSX:GW) posted third-quarter profit of $6.3 million, or 20 cents per share, an increase from $1.4 million or four cents a share a year ago. Revenue rose to $282.5 million from $263.4 million.

And drugmaker Pfizer announced it will withdraw its hypertension treatment Thelin, citing liver problems overseas.