BUSINESS

Canadian dollar lower, weak German trade data fuels recession fears

10/09/2014 08:35 EDT | Updated 12/09/2014 05:59 EST
TORONTO - The Canadian dollar was lower late morning Thursday as the greenback stengthened against other currencies, particularly the euro, following another dose of weak data from Germany that raised worries about Europe's economic powerhouse.

The loonie fell 0.26 of a cent to 89.8 cents US.

The latest data showed that German exports plunged in August as increasing uncertainty over the crisis in Ukraine and the timing of summer holidays combined to produce the largest drop in five years. August exports dropped 5.8 per cent over July while imports dropped 1.3 per cent.

Other German industrial data released this week also showed drops in factory orders and production. The International Monetary Fund also added to investor unease this week after it said global economic growth will be lower than expected this year and next.

The Canadian currency — which has been hovering around the 90-cent mark — had jumped just over half a U.S. cent Wednesday after minutes from the U.S. Federal Reserve's latest meeting showed that central bank officials agreed that they would begin raising interest rates only when measures of the economy's health and inflation signalled the time was right.

They showed that the Fed has moved away from linking any rate change to any specific period.

The Fed also expressed concern about the slowing of the global economy and how a stronger U.S. dollar could impact American economic growth.

The rise in the U.S. dollar also contributed to oil prices in New York falling to December 2012 lows. Crude dropped 92 cents to US$86.39 on top of a $3 tumble over the last two sessions on signs of lower demand and a sharp rise in U.S. inventories last week.

Other commodity prices edged higher. December copper gained three cents to US$3.03 a pound while December gold jumped $17.20 to US$1,223.20 an ounce.

Meanwhile, traders looked to the major Canadian economic report for the week. On Friday, Statistics Canada releases the jobs report for September and economists expect that the economy cranked out about 15,000 jobs.