The Canadian dollar closed down a quarter of a cent Friday, coming under pressure from a strong U.S. dollar and lower prices for many of the commodities that Canada produces.The loonie, which has been trading near 11 months lows in recent weeks, ended off 0.25 of cent at 96.89 cents (U.S.).
The drop followed a report by the U.S. Commerce Department that orders for long-lasting manufactured goods rebounded in April, buoyed by more demand for military and civilian aircraft and an increase in business investment.
It said durable goods orders rose 3.3 per cent last month after a 5.9 decline in March.
More spending by businesses could ease fears that companies are worried about slower global growth and offset deep cuts in U.S. federal government spending.
On Thursday, HSBC reported that its preliminary Purchasing Managers Index for China fell to a seven-month low of 49.6 in May from April’s 50.4. Analysts had expected a more modest decline to 50.3. Anything under 50 shows a contraction.
Jennifer Radman, a portfolio manager with Caldwell Securities Ltd., said the loonie looks to Chinese data and commodities for a cue on which direction to go.
“It’s very much based on what China decides to release,” she said. “Obviously with the weakness there and the weakness in the commodity prices, the loonie hasn’t been doing so well against the U.S. dollar.”
Meanwhile, the commodities market continued to see modest declines.
The July crude contract was down 10 cents to $94.15 barrel, while June gold bullion lost $5.20 to $1,386.60 an ounce. July copper dipped a penny to $3.29 a pound.