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The Canadian dollar lost ground against its major opponents on Thursday morning in New York as some weak economic data from both the U.S. and Canada propelled traders to flee from the nation's higher-risk, resource-linked currency.
The pace of Canada's robust recovery appears to be losing momentum, as the booming housing industry shows signs of slowing down after a period of remarkable resiliency.
Statistics Canada's composite leading index slowed to a 0.4% increase in July, after a gain of 0.7% in June, it was revealed today. Analysts had expected a 0.7% increase.
Meanwhile, the Canadian wholesale sales remained sluggish in June, falling slightly for a second month in a row amid a notable drop in machinery and equipment sales.
Wholesale sales declined 0.3% to C$43.9 billion in June, according to data released by Statistics Canada today. The decrease came as a surprise to analysts, who were looking for an increase of 0.4%, following May's decline of 0.1%.
Weak data from across the Atlantic drove the crude prices lower, with the light Sweet Crude Oil futures for September delivery is currently down by more than $1 to $74.37 a barrel.
Yesterday, oil bounced back from an intra-day low of below $74 after the data from the EIA revealed a marginal decrease in weekly U.S. crude oil inventories.
The Canadian dollar depreciated almost 1.3 percent to reach a 2-day low of 1.0385 against the US dollar around 11:05 am ET from its previous session's 13-day high of 1.0250. On the downside, 1.05 is seen as the next likely support level for the Canadian currency.
In the U.S., the first time claims for unemployment benefits showed another unexpected increase in the week ended August 14th, according to a report released by the Labor Department today.
The report showed that initial jobless claims rose to 500,000 from the previous week's revised figure of 488,000. Economists had been expecting jobless claims to slip to 475,000 from the 484,000 originally reported for the previous week.
At the same time, conference Board's leading indicators index for July increased by less than economists had expected.
The leading indicators index edged up by 0.1 percent in July following a revised 0.3 percent decrease in June. Economists had expected the index to increase by 0.2 percent compared to the 0.2 percent drop originally reported for the previous month.
The Philadelphia Federal Reserve said its diffusion index of current activity fell to a negative 7.7 in August from a positive 5.1 in July, with a negative reading indicating a contraction in manufacturing activity. The steep drop came as a big surprise to economists, who had expected the index to rise to a reading of 7.5.
Against the yen, the Canadian dollar dropped to a 2-day low of 81.92 around 10:40 am ET, down from a 9-day high of 83.56 hit in the previous session. The loonie-yen pair is presently worth 82.02 with 81.60 seen as the next likely support level.
The Canadian dollar plunged by more than 1.5 percent to reach a 2-day low of 1.3364 against the euro around 11:10 am ET from its early Asian session's 5-week high of 1.3159. On the downside, the loonie may find target around the 1.3420 level.
German annual producer price inflation continued to increase in July, a report by the Federal Statistical Office showed today. The producer price index, or PPI, rose 3.7% year-on-year in July, faster than a 1.7% growth in the previous month. Economists were looking for an increase of 3.3%.
On a monthly basis, the PPI rose 0.5% in July, slower than a 0.6% growth in the previous month. Economists had expected an increase of 0.1%.
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