RTTN: Canadian dollar climbs to new multi-month highs against euro and yen
Monday morning in New York, the Canadian dollar jumped to new multi-month highs against the euro and the yen as the crude oil prices climbed above $68 a barrel today as investors shrugged off gloomy economic reports and held out hope for a global recovery.
Crude oil continued to surge on Monday morning and added to its best levels on 2009 as positive manufacturing data from China boosted hopes for demand. At 10:25 am ET, the light sweet crude for July delivery rallied to $67.66, up $1.35. Prices reached as high as $68.29 in electronic trading.
The crude prices inched higher in the morning after a report showed that China's manufacturing Purchasing Manager's Index stayed above 50 in May, indicating an economic recovery. China, the world's second-biggest energy consumer, increased prices of gasoline and diesel by as much as 8 percent today, a move that may prompt domestic refiners to boost crude purchases for processing.
However, the release of key reports painted a bleak picture on the strength of Economy as Canada's real gross domestic product slumped to its largest quarterly decrease since 1991.
According to data released today by Statistics Canada, real GDP fell 0.3% in March. Both domestic and international demand continued to weaken. The declines in February and March were less pronounced than those in the preceding three months.
Lower spending in Canada and the United States, particularly business investment in plant and equipment, led to a sharp decline in Canada's exports and imports.
Real GDP contracted at an annualized rate of 5.4% in the first quarter, compared with a 5.7% decline in the US economy.
At the same time, a report released by Statistics Canada showed that Canadian industrial and raw materials prices fell in April. The Industrial Product Price Index (IPPI) and the Raw Materials Price Index (RMPI) were both down 0.5% in April compared with March.
The Canadian dollar climbed to 1.5349 against the common unit of Europe around 8:35 am ET and this set the highest mark for the loonie since January 13. The pair attempted to reverse direction thereafter but the loonie regained momentum in late morning. At about 10:40 am ET, the euro-loonie pair was worth 1.5351 compared to Friday's closing value of 1.5426.
Reports said citing data released by the Markit Economics that the manufacturing purchasing mangers index or PMI for the euro area rose to a seven-month high of 40.7 in May from 36.8 in April and from the flash reading of 40.5.
