The Canadian dollar is trading relatively mixed to start the trading week as the loonie struggles to find direction amid disappointing economic data and a weaker US dollar. With crude oil prices only up slightly, the Canadian dollar is unable to record considerable gains against a plethora of currency rivals.
According to Statistics Canada, manufacturing sales fell 2% to $52.4 billion in August, down from a 7.2% surge in July. The market had penciled in a boost of 1.4%. This was the first monthly decline in manufacturing sales since April, driven primarily by slumping sales for motor vehicle parts, plastics, and rubber. However, the manufacturing sector did enjoy a boost in sales for wood, gold, silver, and miscellaneous products.
In August, wholesale sales rose 0.3%, down from a 5.2% gain in July. They did match market expectations. Wholesales reported gains in four of the seven subsectors, led by building material and supplies and automobiles. The sector suffered declines in pharmaceuticals and food. Still, wholesale sales in August were 1.7% above February’s pre-pandemic levels.
Meanwhile, the statistics agency is reporting that foreign investors acquired $15.5 billion of Canadian securities in August after selling $8.6 billion in the previous month. Foreign securities purchases by Canadian investors ballooned $5.7 billion in August, up from a tepid $1.3 billion in July.
Energy prices could not add much momentum to the loonie, with crude oil recording a modest gain. December West Texas Intermediate (WTI) crude oil futures picked up $0.13, or 0.32%, to $41.01 per barrel on the New York Mercantile Exchange. November natural gas futures dipped $0.032, or 1.15%, to $2.741 per million British thermal units (btu).
Canada maintains a currency account deficit, so it relies primarily on exports to support the national economy. Since the country’s top export is oil and gas, any significant change in prices – high or low – can have a broader impact on the nation.
The bond market was mostly in the green to kick off the trading week. The benchmark 10-year bond rose 0.004% to 0.581%. The three-year note added 0.01% to 0.249%, while the 30-year bond jumped 0.003% to 1.169%.
The USD/CAD currency pair tumbled 0.29% to 1.3155, from an opening of 1.3190, at 17:34 GMT on Monday. The EUR/CAD increased 0.28% to 1.5500, from an opening of 1.5452.