News Column

Canadian dollar lower amid strong U.S. durable goods data, mixed commodities

July 25, 2014

Malcolm Morrison, The Canadian Press



TORONTO - The Canadian dollar was lower Friday while the greenback strengthened following the release of data showing a rebound in U.S. durable goods orders.

The loonie dropped 0.19 of a cent to 92.88 cents US as orders for durable goods, such as machinery, computers and related products and commercial aircraft, increased by 0.7 per cent during June. Orders had dropped one per cent in May.

The U.S. dollar had also picked up strength earlier in the morning after data showed that German business confidence fell for a third consecutive month amid ongoing concerns about the economic impact of the crises in Ukraine and the Middle East.

The Ifo institute said its closely watched business confidence index, based on responses from some 7,000 companies, fell to 108 points in July from 109.7 points in June. It was a worse showing than economists had expected.

Businesses’ assessment of their current situation and of the outlook for the next six months both fell.

It is a very heavy week coming up for U.S. economic data with the latest reading on consumer confidence on Tuesday, U.S. second-quarter gross domestic product and an interest rate decision by the Federal Reserve on Wednesday, while the week ends with the Institute for Supply Management's manufacturing reading and the government's employment report for July.

In Canada, the major report is the May reading on gross domestic product coming out on Thursday.

Geopolitical concerns also cast a shadow over markets ahead of the weekend as Israeli forces continued to pound targets in the Gaza strip in an 18th day of fighting.

Meanwhile, the Ukrainian army on Friday claimed that soldiers came under artillery fire from the Russian side of the border overnight and were attacked by rebels in several other places in the restive east.

International observers from the Organization for Security and Co-operation in Europe on Friday were travelling to inspect the wreckage of the downed Malaysia Airlines plane and to search for more bodies. Human remains are still being found at the crash site a week after the plane was shot down by a surface to air missile in eastern Ukraine.

On the commodity markets, September crude on the New York Mercantile Exchange dropped 55 cents to US$101.52 a barrel.

August gold gained $4.70 to US$1,295.50 an ounce, while September copper was unchanged at US$3.27 a pound.


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Source: Canadian Press DataFile


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