Canadian dollar falls, traders look to slew of U.S., European economic reports
Nov 6, 2013 / 5:02 am
TORONTO - The Canadian dollar closed lower Tuesday amid mixed commodities while traders looked to a stronger than expected reading from the U.S. non-manufacturing sector.
The loonie was down 0.37 of a cent at 95.62 cents US.
On Tuesday, the Institute for Supply Management said its non-manufacturing index for October showed higher than expected expansion with a reading of 55.4. Economists had expected the index to come in at 54.
The run of data this week also includes U.S. third-quarter growth data and culminates in the latest U.S. employment report.
That data will go a long way to determining when the Federal Reserve will start to reduce its monetary stimulus.
Expectations for October job creation in the U.S. are modest, with economists forecasting that the economy cranked out only about 125,000 jobs. The jobless rate likely ticked up 0.1 of a point to 7.3 per cent, reflecting the number of private sector employees who were temporarily laid off during the partial U.S. government shutdown.
Canadian employment figures also come out Friday and the consensus calls for the creation of about 10,000 jobs.
Meanwhile, the European Commission says that the European Unionâ€™s economy is expected to grow 0.5 per cent over the second half of the year, leaving it flat for the whole year, and expand 1.4 per cent in 2014. Its last predictions, issued in May, had expected an economic decline of 0.1 per cent in 2013.
However, the 17-country eurozone is still expected to record a decline of 0.4 per cent this year.
Traders also looked to the monthly policy meeting of the European Central Bank. Until last weekâ€™s news that the annual inflation rate in the eurozone fell to just 0.7 per cent in October, no change in policy was expected. Now, many economists think the ECB will either reduce its main interest rate to a record low of 0.25 per cent or hint at future easing.
On the commodity markets, December crude on the New York Mercantile Exchange lost $1.25 to a five-month low of US$93.37 a barrel. Oil has fallen about 5.4 per cent since Oct. 28 as data has shown greater than expected inventory levels in the U.S.
December copper was a cent higher at US$3.26 a pound while December bullion gave back $6.60 to US$1,308.10 an ounce.
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