The Canadian dollar is adding to its losses against the US counterpart in the middle of the trading week. The loonie is struggling to enter into positive territory as the bond market is red across the board and producer prices still hot. Can the buck generate some momentum in the final quarter of 2021?

According to Statistics Canada, the industrial producer price index (PPI) increased 14.3% year-over-year in August, down from the 15.7% boost in the previous month. The hot PPI was driven by higher prices for petroleum energy products, iron and steel goods, and petrochemicals.

On a month-over-month basis, producer priced eased 0.3% in August.

Raw material prices also surged in August, advancing at an annualized basis of 27.7%, down from the 37.7% reading in July. The Raw Materials Price Index tumbled 2.4% in August amid falling energy prices, including crude oil. However, rising crop products, like wheat and canola, contributed to the index’s gains.

In other economic data, average weekly earnings increased 1.77% year-over-year in July.

Energy commodities slumped in the middle of the trading week, adding to the loonie’s weakness. November West Texas Intermediate (WTI) crude oil futures dipped $0.06, or 0.08%, to $75.23 per barrel. November natural gas futures plummeted $0.347, or 5.9%, to $5.533 per million British thermal units (btu).

Canada maintains a current account deficit, so the Great White North depends on exports for economic growth. Oil and gas remain the country’s top shipments, so any price change can impact the loonie and the broader economy.

On Friday, the gross domestic product (GDP) for July and the September IHS Markit manufacturing purchasing managers’ index (PMI) will be released.

The Canadian bond market was mostly in the red, with the benchmark 10-year yield down 0.021% to 1.479%. The one-year bill slipped 0.046% to 0.274%, while the 30-year bond fell 0.002% to 1.96%.

The USD/CAD currency pair surged 0.51% to 1.2751, from an opening of 1.2687, at 15:54 GMT on Wednesday. The EUR/CAD tumbled 0.09% to 1.4808, from an opening of 1.4821.