By TraderVox.com
Tradervox (Dublin) -The Canadian dollar dropped against major currencies as commodities declined on concerns the US economic growth is slowing. A report from the US showing that Retail Sales declined in May for the second straight month aggravated the situation. Further, the Canadian currency dropped as Spain was degraded by Moody’s three steps down prior to an election in Spain. This has spur investors to seek safe haven assets hence decline in commodity related currencies. The drop in the Canadian dollar also came as the market prepares to receive a report from the country showing Industrial companies’ production was steady last month.
According to Shane Enright of Canadian Imperial Bank of Commerce working as an Executive director of the World Market Department suggested that the loonie is tracking equities where flows have been light hence the decline. In addition, Shane said that the market is also watching for the Greece election hence the slow movement of equities. The US Commerce Department report that the Retail Sales dropped by 0.2 percent last month has affected the demand for the loonie as a similar decline was also reported in April. Investors are speculating that the Fed will make additional stimulus as employment drops and economic growth remain sluggish.
Talking about the US Retail Sales report, Steve Butler, the Director of Foreign-Exchange trading at Bank of Nova Scotia in Toronto said that the numbers were disappointing but added that most people expected such a report. He also added that the main focus of the market is on euro zone as Greece goes to the poll on June 17.
The Canadian dollar dropped after the report, shedding 0.4 percent against the US dollar to trade at C$1.0303 per US dollar at the close of trading in Toronto. George Davis, a Technical Analyst at Royal Bank of Canada said that loonie is appreciating after it strengthened below 1.0355 on June 6.
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