By TraderVox.com
Tradervox.com (Dublin) – The loonie has dropped to its lowest level in a month against the greenback after report from China showed that Non-Manufacturing industry grew less than projected dampening the demand for the currency spurred by the US data showing US employers employed more workers. The currency has dropped for the second day prior to a report on Friday projected to show that employers in Canada took in fewer workers in September than in July. Other reports that have contributed to higher safety demand include the euro area services and manufacturing output which shrunk in September. Canada’s major export, crude oil, has also dropped below $90 per barrel as commodities prices fell across the markets.
Greg Moore, a currency strategist in Toronto at Toronto-Dominion Bank, noted that the Canadian dollar has dropped together with other commodity related currencies as manufacturing in China is seen to drop and as crude oil and commodities dropped. He projected that there will be continued global growth slowdown into the end of the year, and this will add pressure to the risk currencies. Crude oil futures fell by 4.2 percent to $87.99 a barrel in New York while standard and poor’s 500 Index gained by 0.4 percent. The government’s ten-year yields fell by 0.001 percentage point to 1.71 percent. The market is now turning its focus to US and Canadian employment data to be released on Friday.
There is a high probability and expectation in the market that the Bank of Canada will make changes to its interest rate in the coming month. The demand for safety pushed the loonie down by 0.4 percent against the greenback to exchange at 98.76 cents per US cents at the close of trading in Toronto yesterday. The Canadian dollar had dropped to its lowest since September 6 of 98.84 during the intraday trading.
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