BUSINESS

Canadian dollar slips amid higher retail sales, signs of slowing Chinese growth

04/23/2013 08:46 EDT | Updated 06/23/2013 05:12 EDT
TORONTO - The Canadian dollar closed slightly lower Tuesday amid a strong retail sales report while prices for oil and copper slipped on further signs of weak global growth.

The commodity-sensitive currency dipped 0.01 of a cent to 97.45 cents US as Statistics Canada reported that retail sales rose 0.8 per cent to $39.5 billion in February, a second consecutive monthly sales gain.

However, the agency said that retail sales in volume terms were flat after removing the effects of price changes, particularly higher gasoline prices.

Meanwhile, a preliminary survey by HSBC Corp. found that China’s manufacturing growth slowed in April.

HSBC’s monthly purchasing managers' index fell to a worse-than-expected 50.5 from March's 51.6. Anything below 50 would have signalled a contraction in activity.

The HSBC report came out a week after other data showed the world's second-largest economy grew at a 7.7 per cent rate in the most recent quarter, crushing hopes for growth of around eight per cent.

The dollar also took a hit last week amid a downgrade of global economic growth by the International Monetary Fund.

The Chinese data out Tuesday raised fresh worries about demand and the June crude contract on the New York Mercantile Exchange declined a penny to US$89.18 a barrel.

May copper on the Nymex fell four cents to US$3.09 as Goldman Sachs on Monday cut its three-, six- and 12-month copper forecasts following a heavy sell-off over the past two months.

June bullion was down $12.40 at US$1,408.80 an ounce.

In Europe, an equivalent survey into manufacturing conditions among the 17 European Union countries that use the euro disappointed, too. The PMI survey from Markit fell another 0.3 points in April to 46.5.

On a more positive note, other data showed that U.S. sales of new homes rebounded in March to the second-fastest sales pace in three years.

The U.S. Commerce Department said sales of new homes increased 1.5 per cent in March to a seasonally adjusted annual rate of 417,000. Sales have risen 18.5 per cent from a year ago. The median price of a new home was $247,000 in March, up three per cent from a year ago.