CT: Canadian dollar adds to losses amid weak retail data
TORONTO -- The loonie was lower Thursday amid Canadian retail sales report for June that was much weaker than economists were expecting.
Also, the Amrican dollar continued to appreciate on growing indications the U.S. Federal Reserve is set to begin winding up a key economic stimulus program.
The loonie lost 0.31 of a cent to 95.17 cents US after Statistics Canada reported that retail sales fell by 0.6 per cent. Economists had forecast a 0.4 per cent dip following a strong 1.9 per cent rise in May.
The agency said that "strong sales in May, a Quebec labour strike, and flooding in southern Alberta contributed to lower sales in eight of 11 subsectors in June, representing 57 per cent of total retail trade."
The Canadian dollar's decline Thursday follows a slide of more than 3/4 of a cent on Wednesday after the Federal Reserve published minutes of its June policy meeting.
The minute showed most Fed officials appeared comfortable with the idea of starting to reduce its US$85 billion of monthly bond purchases.
However, there was some disappointment that the minutes didn't contain clarity over whether the so-called tapering will begin in September or December.
U.S. bond yields continued to rise, with the benchmark 10-year Treasury up 0.03 of a point to 2.93 per cent. Yields have steadily climbed since May when Fed chairman Ben Bernanke first mentioned the possibility of the central bank cutting back on its latest quantitative easing.
Commodity prices advanced amid stronger than expected manufacturing data from China and Europe.
A survey from HSBC provided further evidence that China, the world's second-largest economy, may be over its recent soft patch. Its monthly purchasing managers' index, a gauge of business activity, rose to 50.1 points for August from July's 47.7. Numbers above 50 indicate an expansion in activity.
And the monthly composite PMI, which includes both manufacturing and services, for the 17-country eurozone rose to 51.7 in August from 50.4. The index, published by financial information company Markit, is now at its highest level since June 2011 and provides further evidence that the eurozone recovery from recession is gathering pace.
The October crude contract on the New York Mercantile Exchange climbed 31 cents to US$104.16 a barrel.
September copper on the Nymex gained six cents to US$3.37 a pound while December bullion slipped 40 cents to US$1,369.70 an ounce.
