TORONTO - The Canadian dollar dropped to its lowest level in nearly two years on Tuesday as the U.S. dollar gained traction on confidence over the direction of bond yields and the broader U.S. economy.
The Canadian dollar ended down 0.28 of a cent at 94.80 cents US, its lowest closing price since October 2011.
The decline came amid expectations that current U.S. monetary policy will help drive U.S. bond yields higher.
Meanwhile, the latest data on U.S. factory orders showed a pick up in the manufacturing sector. The Commerce Department said Tuesday that factory orders rose 2.1 per cent last month. April's increase was revised higher to 1.3 per cent from one per cent.
Economies around the world were also facing pressure, which drove down other currencies.
Australia's central bank left interest rates unchanged and said the Australian dollar is likely to continue falling, easing pressure on the economy.
And in China, manufacturing weakened in June amid a credit crunch.
In commodities, the August crude contract on the New York Mercantile Exchange was ahead $1.61 at US$99.60 a barrel — the highest price it's been since May 3, 2012.
August bullion moved down $12.30 to US$1,243.40 an ounce on the Nymex. Copper prices fell 1.4 cents to $3.14.