Loonie lower amid disappointing economic data
Canadian dollars, or loonies, sit on American dollar bills on Sept. 20, 2007 in Montreal. The Canadian dollar has closed above parity with greenback for the first time since Sept. 20. THE CANADIAN PRESS/Paul Chiasson
TORONTO - The Canadian dollar closed lower Wednesday as prices for oil and metals backed off in the wake of data showing a deepening European economic slump and slowing American job creation.
The commodity-sensitive currency lost 0.07 of a cent to 101.37 cents US.
Payroll firm ADP reported that the American economy cranked out only 119,000 private sector jobs in April, well below the consensus estimate of 170,000.
The report was released two days before the U.S. government non-farm payrolls report for April comes out. Economists are looking for the American economy to have created a total of about 160,000 jobs last month.
Another report showed that manufacturing activity across the eurozone shrank at a faster pace than previously estimated in April.
The final April Markit purchasing managers index fell to 45.9 from a reading of 47.7 in March and was below an earlier estimate of 46. A reading of less than 50 indicates a contraction in activity.
The data showed accelerating downturns for Italy, Spain and Greece.
But even eurozone powerhouse Germany saw shrinking activity as its manufacturing PMI fell to a 33-month low at 46.2.
Demand concerns sent the June crude contract on the New York Mercantile Exchange down 94 cents to US$105.22 a barrel.
Prices for copper, viewed as an economic bellwether since the metal is used in so many industries, also fell with the May contract down six cents to US$3.79 a pound.
Gold bullion prices were also lower with the June contract falling $8.40 to US$1,654 an ounce.
Also depressing commodity prices was a survey of purchasing managers by HSBC which shows China’s manufacturing contracted in April for the sixth straight month.
HSBC said Wednesday that its purchasing managers index for April was 49.3, up from 48.3 in March. The index has remained below 50, the level indicating expansion, since October.
The HSBC survey tends to reflect private and export-sector activity more strongly than an official index, released Tuesday, that showed manufacturing gaining last month.
The Canadian dollar is down more than half a cent US this week, also pressured by data from Monday showing the Canadian economy contracted 0.2 per cent in February. The weak showing indicated to traders that the Bank of Canada is in no hurry to raise interest rates.
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