RTTN:Canadian Dollar Down Against Greenback, Yen As Crude Falls On Hurricane Worries
The Canadian dollar edged lower against the currencies of the U.S. and Japan in early deals Monday as the price of crude oil fell before Hurricane Sandy strikes the U.S. East Coast.
Light Sweet Crude Oil (WTI) futures for December delivery, shed $0.72 to $85.56 a barrel. Last week, oil settled near a 3-month low on demand growth concerns after an Energy Information Administration weekly oil report showed U.S. crude oil stockpiles to have increased more than expected last week.
The Canadian dollar continued to move lower against its U.S. counterpart in early deals Monday, falling below the parity level for the first time since August 7. As of 7:30 am ET, the Canadian dollar was trading at 1.0002 with 1.0040 seen as the next likely support level.
The Canadian dollar also underperformed against the yen in early deals, falling as low as 79.58 around 7:20 am ET, its weakest level since October 10. The next likely support for the loonie-yen pair is visible around the 78.80 level.
Japanese retail sales grew less-than-expected in September as the government subsidies for fuel-efficient car purchases came to an end, raising concerns that the economy may slide into recession and increasing the pressure faced by the Bank of Japan to loosen policy further.
The disappointing news from the retail front adds to a recent run of weak economic data. The decline in consumer prices for the fifth consecutive month in September coupled with political pressure is likely to prompt the Bank of Japan to ease policy further tomorrow to battle deflation and support the economy.
Retail sales rose 0.4 percent year-on-year, following a revised 1.7 percent gain in August, data from the Ministry of Economy, Trade and Industry showed today. Economists had forecast a 1.2 percent increase.
Sales increased for the second straight month following a 0.7 percent decline in July. Meanwhile, automobile sales were down 1.6 percent from a year ago, marking the first decline in 12 months. Month-on-month, sales tumbled 3.6 percent in September, which was reportedly the biggest fall since the March 2011 earthquake and tsunami disaster.
The BoJ is widely expected to cut its forecast for GDP and inflation at the conclusion of its 2-day Monetary Policy Board meeting on Tuesday. Speculation is also rife that the bank will consider another round of monetary easing at the meeting.
The Canadian dollar moved in tight ranges against the struggling euro, moving in a narrow range of 1.2907 and 1.2884 in most of Monday's early deals. The euro was mostly weaker against the dollar on continued uncertainty over Greece and Spain.
Looking ahead, the U.S. personal income and spending data for September, German CPI for October and the Dallas Fed's manufacturing activity index for October are expected in the upcoming session.
