By TraderVox.com
Tradervox.com (Dublin) – The loonie has declined for the second day against the US counterpart as crude oil prices tumbled to three months low and stocks fell as concerns of economic growth dampened the demand for higher yielding assets. The Canadian dollar dropped as Canada’s existing home sales dipped the most in over two years in August and as US manufacturing measure showed contraction. The loonie dropped as European Finance Ministers met to discuss measures to quell the debt crisis in the region. A report from Canada is expected to show that inflation rate is still at 1.3 percent on Sept 21, when it will be released.
Blake Jespersen, who is the Managing Director of Foreign Exchange at the Bank of Montreal in Toronto, said that the loonie fell from the selling pressure on oil during the after session yesterday. He noted that there is always a correlation between the loonie and crude oil, hence when the crude oil falls traders expects the currency to fall also. The Canadian bonds also declined with ten-year benchmark dropping by 0.02 percentage point to settle at 1.95 percent. The crude-oil futures declined by 2.4 percent in New York after they plunged 4.4 percent during the day, dropping more than $3 in less than a minute as October contracts neared expiration.
Canadian home sales dropped by 5.8 percent in August to 35,869 from July’s figure of 38,063 according to a Canadian Real Estate Association report. Annualized home sales were down 8.9 percent from the August last year. The report also showed that the price of existing homes increased by 1.1 percent from July and edged up by 0.3 percent within a year.
The Canadian dollar has declined against its US counterpart by 0.4 percent to exchange at 97.48 cents per dollar. The currency has however gained by 4.8 percent this year, reaching its strongest of 96.33 on September 14.
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