The Canadian dollar lost ground Monday while commodity prices fell amid another shot of depressing economic news from Asia. The loonie lost 0.15 of a cent to $1.0076 (U.S.).
Benchmark crude for September delivery was down 14 cents at $92.73 a barrel on the New York Mercantile Exchange after data showed that Japan’s economy grew by only 0.3 per cent in the second quarter from the previous three-month period, half the rate that was expected. It was also sharply lower from the first quarter’s upwardly revised rate of 1.3 per cent.
The stall reflected the fallout from Europe’s debt crisis and the sharp rise in the value of the yen, which makes it more difficult for the country’s export sector to compete in the international marketplace.
Crude prices had also retreated Friday after the International Energy Agency lowered its forecast for global crude demand for the year to 89.6 million barrels a day from 89.9 million due to a “combination of persistently high prices and a weak economic backdrop.”
Metals continued to fall following news Friday that export growth in China during July plunged to just one per cent from the previous month’s 11.3 per cent, which was well below forecasts of about five per cent.
September copper on the Nymex was off another four cents to $3.35 a pound. Copper slipped three cents Friday in the wake of the disappointing Chinese data. China is the biggest consumer of the metal.
December gold faded $10.20 to $1,612.60 an ounce.
On a positive note, the disappointing economic data fuelled hopes that central bankers are preparing to act to keep a fragile economic recovery going.
Investors are also counting on the European Central Bank to do whatever is necessary to keep the continent’s monetary union intact.
On the economic calendar, attention this week will focus partly on U.S. retail sales. That report comes out Tuesday before the market open.
Other highlights of the economic calendar this week include the June reading on Canadian manufacturing shipments. Statistics Canada was expected to report a rise of 0.3 per cent following a 0.4 per cent dip in May. In addition, the July Consumer Price Index report comes out Friday. Economists expect the data to show a 0.2 per cent rise from the previous month.
Traders will also take in the first estimate of second-quarter economic growth in the 17-country eurozone on Tuesday.