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Loonie falls as Canadian data shows economic momentum easing

09/16/2021 | 03:26pm EDT
FILE PHOTO: A Canadian dollar coin, commonly known as the

TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Thursday as the greenback notched broad-based gains and investors weighed domestic data showing some weakening in activity.

The loonie was trading 0.3% lower at 1.2675 to the greenback, or 78.90 U.S. cents, after moving in a range of 1.2616 to 1.2698.

Canadian wholesale trade fell by 2.1% in July from June, the biggest decline since April last year, and housing starts were down 3.9% in August compared with the previous month.

"Momentum (in housing starts) has been moderating after unprecedented strength earlier in the year," Shelly Kaushik, an economist at BMO Capital Markets, said in a note.

Foreign investors are growing more worried that Canada's federal election on Monday could result in a deadlock that hampers Ottawa's response to the COVID-19 pandemic and further slows the economic recovery from the crisis.

The U.S. dollar climbed to a near 3-week high against a basket of currencies after data showing U.S. retail sales unexpectedly increased in August.

The data could ease some concerns about a sharp slowdown in the U.S. economy, ahead of a Federal Reserve policy meeting next week.

U.S. crude prices were unchanged at $72.61 a barrel as the threat to U.S. Gulf production from Hurricane Nicholas receded. Oil is one of Canada's major exports.

Canadian government bond yields were higher across the curve. The 10-year touched its highest since Aug. 12 at 1.272% before pulling back to 1.231%, up 1.2 basis points on the day.

(Reporting by Fergal Smith; Editing by Bernadette Baum)

By Fergal Smith

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / CANADIAN DOLLAR (AUD/CAD) 0.40% 0.93142 Delayed Quote.-4.84%
BRITISH POUND / CANADIAN DOLLAR (GBP/CAD) 0.27% 1.70309 Delayed Quote.-1.86%
CANADIAN DOLLAR / JAPANESE YEN (CAD/JPY) -0.11% 91.85 Delayed Quote.13.60%
CANADIAN DOLLAR / SWISS FRANC (CAD/CHF) -0.52% 0.73817 Delayed Quote.6.84%
EURO / CANADIAN DOLLAR (EUR/CAD) 0.60% 1.44325 Delayed Quote.-7.52%
LONDON BRENT OIL -0.18% 83.98 Delayed Quote.66.58%
NEW ZEALAND DOLLAR / CANADIAN DOLLAR (NZD/CAD) 0.38% 0.88918 Delayed Quote.-2.78%
US DOLLAR / CANADIAN DOLLAR (USD/CAD) -0.18% 1.2349 Delayed Quote.-2.64%
WTI 0.45% 82.511 Delayed Quote.74.79%
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