TORONTO - The Canadian dollar gave up early gains and closed lower Monday amid falling commodity prices and a gloomy assessment from top Canadian executives.
The loonie was down 0.07 of a cent at 102.04 cents US as the Bank of Canada’s latest Business Outlook Survey showed a general easing of expectations for sales, investments and hiring. On most questions in the survey, business executives were more pessimistic than they had been three months ago.
For sales expectations, there were as many who anticipated volumes to slow from the pace of the previous 12 months as pick up, only the second time since mid-2009 that expectations were not positive.
Traders also looked ahead to a speech and news conference later in the day by Bank of Canada governor Mark Carney.
The dollar had been positive earlier in the session as risk appetite picked up after data released Sunday showed that China’s consumer price index for September rose 1.9 per cent from a year earlier, down from a two per cent advance in August.
Another report released late Friday after North American markets closed showed that China’s international trade surplus widened to $27.7 billion. Exports unexpectedly jumped 9.9 per cent year- over-year, which was the best pace in three months.
China’s third-quarter economic growth data will be released Friday. GDP growth is expected to ease to 7.4 per cent year-over-year, which would be the slowest pace since the first quarter of 2009. China has taken a number of steps over the last couple of years to slow its red-hot economy in order to get a grip on unacceptably high inflation.
Also, U.S. retail sales rose sharply in September, up 1.1 per cent. The rise followed a 1.2 per cent gain in August and was much higher than the 0.8 per cent gain that economists expected.
The commodity sensitive currency was pressured by lower prices for metals and oil.
The December copper contact was unchanged at US$3.70 a pound, November crude dipped one cent to US$91.85 a barrel and the December bullion contract declined $22.10 to US$1,737.60 an ounce.