Loonie lower, IMF cuts growth forecast; Chinese manufacturing data improves
TORONTO - The Canadian dollar closed lower Thursday as the International Monetary Fund warned that the domestic economy will slow alongside the global economy this year.
The loonie was down 0.14 of a cent to 93.07 cents US as the IMF said economies around the world are taking longer than expected to recover.
Its latest economic outlook predicts global growth will be about three-tenths of a point lower at 3.4 per cent this year than it thought in April.
Canada's economy is now expected to expand by 2.2 per cent this year, one-tenth of a point slower than previously thought and in line with the Bank of Canada's latest forecast.
The dollar had earlier registered a small gain amid rising metal prices and strong manufacturing reports from China and Europe.
Chinaâ€™s manufacturing rose in July to its highest level in 18 months.
The preliminary HSBC purchasing managersâ€™ index rose to 52.0 in July from 50.7 in June. A reading above 50 indicates expansion.
And in Europe, financial information company Markit said Thursday that its purchasing managersâ€™ index rose to a three-month high of 54 points in July from 52.8 in June. Much of the increase was due to ongoing economic strength in Germany, Europeâ€™s biggest economy. However, Markit also found businesses in the â€œperipheryâ€ countries outside of Germany and France expanding at their fastest pace since 2007.
Overall, Markit says the eurozone is growing at a 0.4 per cent quarterly tick, which equates to an annualized 1.6 per cent rate.
On the commodity markets, the Chinese manufacturing data sent September copper up six cents to US$3.27 a pound.
September crude declined $1.05 to US$102.07 a barrel, while August gold was down $13.90 to US$1,290.80 an ounce.
Traders also took in a security breach at the European Central Bank.
The ECB said Thursday that email addresses and other contact information have been stolen from a database that serves its public website, though it stressed that no internal systems or market-sensitive data were compromised.
About 20,000 email addresses may have been compromised, along with a much smaller number of phone numbers and street addresses.
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