By Akin Oyedele Aug 6, 2014 8:36 AM GMT+1200 1 Comment Email Print
Canada’s dollar weakened to the lowest level in three months versus its U.S. counterpart as crude oil fell and concern increased that economic growth is accelerating faster in the nation’s largest trading partner.
The currency declined against most of its major peers after a report showed U.S factory orders rose 1.1 percent in June versus a revised 0.6 decline in the previous month. Crude oil, Canada’s biggest export, fell to a six-month low.
“General risk-off sentiment has people buying U.S. dollars,” Greg Anderson, New York-based head of global foreign-exchange strategy at Bank of Montreal, said in a phone interview. “Normally when the dollar rallies, the Canadian dollar is somewhere in the middle of the pack. Today, it was towards the bottom of the pack.”
The loonie, as the Canadian currency is nicknamed for the image of the aquatic bird on the C$1 coin, depreciated to as low as C$1.0977 per U.S. dollar, the weakest since May 5, before trading down 0.5 percent at C$1.0962 at 4:31 p.m. in Toronto. One loonie buys 91.23 U.S. cents.
The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major counterparts, climbed 0.3 percent to 1,023.17 and rose to 1,024.01, the highest level since Feb. 13.
Canada’s dollar lost 2.2 percent in July, the biggest monthly decline since January. The American economy climbed 4 percent at an annual rate in the second quarter, data showed last month.
If the loonie weakens past C$1.10 this week, “there should be very good resistance,” Anderson said. A move past that level will be the result of a weaker-than-forecast jobs report due Aug. 8, he said.
Canadian employers added 20,000 jobs in July, economists in a Bloomberg survey forecast before the report. U.S employers added 209,000 jobs last month, the Labor Department said Aug. 1.
Crude futures declined 0.8 percent to $97.53 a dollar in New York, the least since Feb. 5.