Canadian dollar rises after sharp loss amid disappointing Chinese, U.S. data

Photo: The Canadian Press. All rights reserved.

A Canadian dollar coin, or loonie, and an American dollar are balanced on a scale in Quebec City, on April 7, 2010. THE CANADIAN PRESS/Jacques Boissinot

TORONTO - The Canadian dollar closed higher amid soft readings on the Chinese and U.S. manufacturing sectors.

The loonie was up 0.12 of a cent to 89.33 cents US.

HSBC's purchasing managers' index for China dropped to 48.1 in March from February’s 48.5. It was the lowest reading since July 2013 and was below consensus expectations of a modest rise.

The worse than expected Chinese data suggested that the slowdown in the world’s second-biggest economy is deepening.

In the U.S., the initial or "flash" Markit purchasing managers index for the U.S. fell to 55.5 in March from 57.1 in February, but still showed improving conditions for manufacturers. Readings over 50 in the purchasing managers index indicate growth.

Commodity prices were mixed as May crude on the New York Mercantile Exchange was up 14 cents to US$99.60 a barrel.

May copper was unchanged at US$2.95 a pound while April bullion shed $24.80 to US$1,311.20 an ounce.

The dollar lost about nine-tenths of a US cent last week with the currency feeling pressure from two directions.

Markets were surprised after the U.S. Federal Reserve said it could start raising short-term interest rates as soon as next year.

At the same time, Bank of Canada governor Stephen Poloz said that interest rate hikes in Canada could be further away than thought.

He added that a rate cut by the Bank of Canada could not be ruled out.