Wednesday, April 16th8.6°C

Loonie weakens ahead of Bank of Canada announcement, slate of economic data

TORONTO - The Canadian dollar continued to drift downward Tuesday morning to multi-year lows amid mixed commodity prices and a heavy slate of economic data in Canada and the U.S. this week.

The loonie was down 0.23 of a cent to 93.75 cents US a day before the Bank of Canada's next interest rate announcement. Markets generally aren't looking to the central bank to move up rates until 2015.

The currency closed below 94 cents US on Monday for the first time since the end of August 2010. Tuesday's intraday low as of midday was 93.69 cents US, which matched a level set on Aug. 31, 2010.

Traders looked to economic data coming out later in the week that could give a better idea of where the Federal Reserve is headed in cutting back on stimulus measures.

U.S. economic data this week, culminates with the release of the government’s employment report coming out on Friday.

A strong employment report would raise concerns that the Fed is set to start tapering its US$85 billion of monthly bond purchases that have kept U.S. interest rates low and persuaded many investors to seek higher returns in the stock market.

Economists forecast that the American economy cranked out about 175,000 jobs during November, down 5,000 from October.

Canadian employment numbers also come out on Friday with economists expecting about 7,500 jobs were created during the month.

Other key U.S. data out this week includes trade data for October, new home sales, a report on the latest reading on the health of the U.S. non-manufacturing sector and the latest reading of the U.S. economy from the Fed on Wednesday.

Another key Canadian report for the week is the merchandise trade balance report for October, which is being released on Wednesday. A steady run of trade deficits is one reason the loonie has tumbled more than seven cents US this year.

Other headwinds include weakening oil prices, a U.S. dollar that has risen alongside Fed speculation about tapering and a belief that the Bank of Canada won't raise rates until at least 2015.

Oil prices were slightly higher in the wake of a stronger than expected reading on U.S. manufacturing Monday and ahead of a meeting of the Organization of Petroleum Exporting Countries in Vienna on Wednesday.

Analysts at JBC Energy in Vienna estimate that OPEC’s crude output fell to 29.44 million barrels a day in November, the lowest since May 2011 and the third straight month with output below 30 million.

The January crude contract on the New York Mercantile Exchange climbed $1.99 to US$95.81.

Metal prices were mixed with March copper down one cent to US$3.17 while February gold was up $2 to US$1,223.90.

The Canadian Press

Read more Business News


Recent Trending

Today's Market
S&P TSX14421.32+117.40
S&P CDNX993.291.19
S&P 5001858.67+15.69
CDN Dollar0.9080-0.0028
Natural Gas4.533-0.034

Okanagan Companies
Pacific Safety0.105-0.005
QHR Technologies Inc1.25-0.02
Anavex Life Sciences0.36-0.02
Metalex Ventures0.08+0.005
Russel Metals30.58+0.31
Copper Mountain Mining2.41+0.09
Colorado Resources0.2650.00
ReliaBrand Inc0.12-0.01
Sunrise Resources Ltd0.025-0.005
Mission Ready Services0.23-0.02



1687640317, 3550 Woodsdale Rd
2 bedrooms 2 baths
more details
Click here to feature your property
Please wait... loading

Valuation fears grip markets

The Big Picture Valuation fears grip markets Growing concerns about the level of stock market valuations sparked a risk-off trade in global markets this week. Investors are worried that many companies...

Quick and nimble

Photo: ContributedFor many businesses this has been a tremendously difficult time since the 2008 crisis. Business fell off. Sales techniques that always worked, well… stopped working. Customers...

Keeping a clear focus on the future

Many times when we are gripped by fear it can be one of two mental challenges that we can learn to overcome. Photo: ContributedThe Fear is completely imaginary. In this situation there may be no fact...




Member of BC Press Council