• Sign up for the Daily Digest E-mail
  • Facebook
  • Twitter
  • LinkedIn

BOE Report

Sign up
  • Home
  • Headlines
    • Latest Headlines
    • Columns
    • Discussions
  • Well Activity Map
  • Property Listings
  • Land Sales
  • M&A Activity
    • M&A Database
    • AER Transfers
  • Markets
  • Rig Counts
    • CAODC Rig Count
    • Baker Hughes Rig Count
    • USA Rig Count
  • Industry Data
    • Canada Well Licences
    • USA Market Data
    • Data Subscription
  • Jobs

Loonie hits seven-month low

February 19, 20131:28 PM BOE Report Staff

loonieCP

 

By Malcolm Morrison

TORONTO – The Canadian dollar traded at a fresh, seven-month low Tuesday amid worries centred on fears of massive U.S. government spending cuts, the housing market and oil prices.

The loonie slipped 0.65 a cent to 98.74 cents US.

The dollar has not had a good start to 2013, falling more than 1.5 cents US.

Analyst say there is more than one issue putting pressure on the Canadian currency.

For starters, there’s the looming sequester in the U.S., Canada’s biggest trading partner. That is a huge package of across the board spending cuts worth US$85 billion that are set to take effect at the end of the month unless lawmakers can agree on other cuts that would be more selective.

It would cut a big chunk out of American economic growth, a worrisome prospect for an economy struggling to put in growth of even two per cent and bad news for an export-driven economy like Canada’s.

The housing sector has also been a focus for worry with the International Monetary Fund saying that it is overvalued by a good 10 per cent.

Oil prices have also been a concern because of the gap between Brent crude and Western Canadian Select, which is the crude produced by Western Canada’s oilsands. Recently, that price gap widened to as much as $65 a barrel as pipeline bottlenecks have prevented growing oilsands production from getting to the most lucrative markets. That gap is now down to about $45 amid expectations it will fall even more.

There is also suspense over the future of the Keystone XL pipeline, which would carry bitumen from the Alberta oilsands to U.S. refineries in the Gulf of Mexico.

U.S. President Barack Obama rejected the pipeline last year, but invited TransCanada (TSX:TRP.TO – News) to file a new application with an altered route that would skirt an ecologically sensitive area in Nebraska.

TransCanada did that and is now awaiting word on approval from the U.S. State Department.

Camilla Sutton, chief currency strategist at Scotia Capital, says the near-term outlook for the Canadian dollar is soft but strong in the medium term.

“China’s improved growth outlook, combined with a recovery in the U.S., should also flow into Canada, particularly with regards to lumber and other commodity exports,” she said.

“We would suggest the worst is behind Canada in terms of the Brent-WCS oil spread, housing is undergoing a needed moderate cooling and market risk aversion appears to be abating.”

Traders also took in a couple of pieces of weak economic data.

Statistics Canada said that wholesale sales fell 0.9 per cent in December to $49 billion, after rising 0.7 per cent in November.

The agency said that the decrease was largely a result of lower sales in the computer and communications equipment and supplies industry.

Statistics Canada also said that non-residents reduced their holdings of Canadian securities by $1.9 billion in December, led by large retirements of bonds and equities. This was the second consecutive month of a net outflow of funds in the form of securities.

Commodity prices were lower as the March crude contract on the New York Mercantile Exchange down five cents to US$95.81 a barrel.

Copper prices fell sharply after several local governments in China announced new measures to restrict financing to potential homebuyers. That triggered concerns about a fresh wave of tightening for the property sector.

March copper ticked eight cents lower to US$3.65 a pound. China is the biggest consumer of copper, considered an economic bellwether as it is used in so many industries, including electrical and plumbing in houses.

April gold fell $4.90 to US$1,604.60 an ounce.

Keystone XL

Follow the BOE Report
  • Facebook
  • Twitter
  • LinkedIn
Sign up for the BOE Report Daily Digest E-mail
Latest Headlines
  • Canada’s weekly rig count drops 8 to 177
  • PSAC statement on Alberta Budget 2021
  • U.S. drillers add rigs for 7th month in a row, pace slows
  • Crude-by-rail exports are rebounding after a drastic drop in 2020 due to COVID and other factors
  • TC Energy and TC PipeLines, LP announce unitholder approval and effective date of merger

Return to Home
Alberta Gas
CAD/GJ
Market Data by TradingView





    Note: The page you are currently on will be sent with your report. If this report is about a different page, please specify.

    About
    • About BOEReport.com
    • In the News
    • Terms of Use
    • Privacy Policy
    Resources
    • App
    • Widgets
    • Notifications
    • Daily Digest E-mail
    Get In Touch
    • Advertise
    • Post a Job
    • Contribute
    • Contact
    • Report Error
    Featured In
    • CamTrader
    • Rigger Talk
    Data Partner
    • Foxterra
    BOE Network
    © 2021 Grobes Media Inc.