BUSINESS

Loonie takes a hit as U.S. economy shows further signs of improvement

08/13/2013 09:34 EDT | Updated 10/13/2013 05:12 EDT
TORONTO - The loonie slipped for a second session this week as the latest data from the U.S. showed that an economic recovery is moving forward at a steady pace.

The Canadian dollar was down 0.38 of a cent to 96.68 cents US on Tuesday.

The slide came after the U.S. Commerce Department said retail sales edged up in July despite a drop in auto sales. The report said that retail sales increased 0.2 per cent in July from June.

Sales had risen 0.6 per cent in June from May. The change in both months was driven by autos, which surged 2.9 per cent in June but fell one per cent in July.

The positive U.S. data is evidence that Canada is being outpaced by its biggest trading partner. However, many economists have said Canada will benefit from a revival in the United States, which has been slow to rebound from the recession.

Last week, Canada's unemployment rate rose as Statistics Canada reported a net loss of 39,400 in July, with public sector workers and youth taking on the biggest share of the losses.

Meanwhile, the September crude contract gained 72 cents to settle at US$106.83 a barrel.

December gold bullion dropped $13.70 to US$1,320.50 an ounce, while September copper increased one cent to US$3.31 a pound.