BUSINESS

Canadian dollar declines amid solid housing data, falling oil prices

12/08/2014 08:52 EST | Updated 02/07/2015 05:59 EST
TORONTO - The Canadian dollar closed lower Monday amid tumbling oil prices and data showing continued strength in the housing sector.

The loonie fell 0.38 of a cent to 87.09 cents US as Statistics Canada reported the total value of building permits was $7.5 billion in October, edging up 0.7 per cent from September. The increase came mainly from an increase in construction plans in British Columbia, Alberta and Saskatchewan.

And Canada Mortgage and Housing Corp. reported housing starts increased at an annualized rate of 195,620 units in November, up from 183,659 in October, led by multiple urban starts. Single-detached urban starts decreased to 63,760 units.

Meanwhile, prices for oil retreated in the wake of weak Chinese trade data and a bearish price forecast.

China's exports rose by a weaker-than-expected 4.7 per cent, down from October's 10.6 per cent. Imports were forecast to post a small increase but instead contracted by 6.7 per cent from a year earlier.

China's economic growth slowed to a five-year low of 7.3 per cent in the latest quarter. The ruling Communist Party is trying to cool growth to a more sustainable level, but cut interest rates last month in an apparent effort to reverse the deepening slowdown.

Also, Morgan Stanley analyst Adam Longson said prices for Brent crude, an international benchmark for oil prices, could fall as low as US$43 a barrel next year. The U.S. investment bank cut its 2015 average estimate for Brent by $28 to $70 per barrel, and its 2016 estimate by $14 to $88.

A stronger U.S. dollar also helped push oil well below US$65 a barrel. The January crude oil contract on the New York Mercantile Exchange fell $2.79 to US$63.05 a barrel.

The March copper contract was two cents lower at US$2.89 a pound while the February gold contract gained $4.50 to US$1,194.90 an ounce.