News Column

Canadian dollar falls amid lower oil prices as geopolitical tensions ease

July 10, 2014

Linda Nguyen, The Canadian Press



TORONTO - The Canadian dollar was lower Thursday amid lacklustre economic data from China and downward pressure by falling oil prices.

The loonie dipped 0.10 of a cent to 93.71 cents US.

Overnight, China reported that its June exports grew 7.2 per cent in dollar terms from a year earlier, accelerating slightly from May's seven per cent growth.

The growth was a small sign of improvement for the world's second-largest economy, but still left concerns over the country's uneven recovery as imports remained muted in a sign of weak domestic demand.

"There's a bit of optimism with China's customs office expecting exports growth to accelerate in the third quarter. Imports could also pick up based on improving signs of manufacturing and services activity in the past two months,'' Ryan Huang, a market strategist at IG, said in a commentary.

Meanwhile, Statistics Canada says its new housing price index rose 0.1 per cent in May, following five months of gains and largely due to higher new home prices in the Prairie region. The Calgary area, where prices rose 0.8 per cent, recorded the largest monthly price advance among the municipalities covered by the survey.

But the most anticipated economic data to come out this week will be the Canadian jobs report on Friday.

Statistics Canada is expected to report that about 24,000 jobs were created last month compared with 25,800 in May, with the jobless rate remaining unchanged at seven per cent.

The Canadian currency continues to look for hints that the fundamentals supporting it, including oil prices, still remain strong.

But oil has been falling steadily for more than a week as geopolitical concerns surrounding the world's oil supply have eased. Fears over the supply from Iraq have subsided and Libyan oil is returning to the global market.

Political strife has shut ports and disrupted production in Libya but agreements with local militias are now expected to open two ports. A major field restarted production earlier this week. Analysts said crude shipments could ramp up quickly because oil has accumulated in tanks at the closed ports.

The August crude contract on the New York Mercantile Exchange was down 22 cents to US$102.07 a barrel, after hitting a 10-month closing high of US$107.26 on June 20.

August bullion was up $17.60 to US$1,341.90 an ounce and September copper was unchanged at US$3.24 a pound.

Follow @LindaNguyenTO on Twitter.


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Source: Canadian Press DataFile


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