TORONTO - The Canadian dollar closed lower Tuesday amid a sharp drop in building permits while oil prices tumbled well below the key US$90 a barrel level amid glum economic data from Europe and Asia.
The dollar gave back a chunk of the one-cent jump racked up Monday, down 0.32 of a cent to 89.52 cents US.
Statistics Canada reported the total value of building permits issued by Canadian municipalities fell 27.3 per cent to $6.7 billion in August.
"But keep in mind that permits are extremely volatile, and each of the prior three months saw double-digit percentage increases," BMO Capital Markets senior economist Robert Kavcic said.
The August decline was mainly the result of lower construction intentions for non-residential buildings in Quebec and residential buildings in Ontario.
Overseas, concerns grew that Germany's economy may not rebound as expected in the third quarter as data showed a four per cent drop in industrial output during August. It was the biggest monthly drop in industrial production in five years and was far bigger than the 1.5 per cent decline expected in markets.
The glum data came on the heels of another report Monday showing that German factory orders dropped 5.7 per cent in August from the previous month.
Also, the World Bank said developing countries in East Asia Pacific will see slightly slower economic growth this year. It said growth will come in at 6.9 per cent this year and next, down from 7.2 per cent in 2013. It adds that the pace of growth in the region, excluding China, will pick up next year.
The World Bank said Chinese growth will ease slightly to 7.4 per cent this year and 7.2 per cent in 2015, "as the government seeks to put the economy on a more sustainable path with policies addressing financial vulnerabilities and structural constraints."
Also, the International Monetary Fund trimmed its outlook for global economic growth this year and next, mostly because of weaker expansions in Japan, Latin America and Europe.
The latest overseas economic data helped push the November crude oil contract in New York down $1.49 to US$88.85 a barrel, its lowest close since April, 2013. The December copper contract was unchanged at US$3.04 a pound while the December gold contract was up $5.10 to US$1,212.40 an ounce.
The major Canadian economic release of the week comes on Friday when Statistics Canada releases the employment report for September. Economists expect that the economy cranked out about 15,000 jobs.
September data on housing starts will be released by Canada Mortgage and Housing Corp. on Wednesday.