The Canadian dollar closed lower Monday as data showed expansion in the U.S. manufacturing sector slowed last month.The loonie was down 0.07 of a cent at 98.36 cents (U.S.) as prices for oil and copper declined despite positive data from China’s manufacturing sector.
The Institute for Supply Management’s manufacturing index for March came in at 51.3. Economists had expected the widely-watched index to remain unchanged from February at an 18-month high of 54.2.
But the news wasn’t all bad as the manufacturing survey also showed that employment in the sector rose to a nine-month high, fully erasing February’s decline.
Other data showed that U.S. construction spending increased 1.2 per cent in February from January, a month that saw construction activity drop 2.1 per cent. Spending rose to a seasonally adjusted annual rate of $885.1-billion – 7.9 per cent higher than a year ago.
Meanwhile, the China Federation of Logistics and Purchasing said Monday that the country’s manufacturing picked up in March in a potentially positive sign for the world’s second-largest economy.
Its purchasing managers’ index rose to 50.9 in March from 50.1 in February, which was the lowest reading in five months.
Chinese manufacturing is closely watched as an indicator of global consumer sales and demand for commodities such as copper and oil.
However, despite the improvement in factory output, analysts said investors remained worried about a possible property bubble, inflation and what policies the new Chinese government might have in store.
On the commodity markets, the May crude contract on the New York Mercantile Exchange fell 16 cents to $97.07 a barrel.
May copper slipped 3 cents to an eight-month low of $3.37 a pound while June gold bullion gained $5.20 to $1,600.90 an ounce.
Meanwhile, Russia’s first deputy prime minister, Igor Shuvalov, says his government won’t protect Russian depositors who are losing money in Cypriot banks but may offer assistance to some Russian state companies.
Big depositors at Cyprus’ largest bank, including some Russians, may be forced to accept losses of up to 60 per cent, far more than initially estimated under the European rescue package to save the country from bankruptcy.
Traders also looked ahead to March employment data coming out on Friday.
In the U.S., economists expect job gains totalled about 190,000 in March after the American economy cranked out 236,000 jobs in February, with the unemployment rate staying unchanged at 7.7 per cent.
In Canada, Statistics Canada is expected to report that about 10,000 jobs were created in March. However, CIBC said in a note that it expects only about 5,000 new positions following a blowout performance in February when 50,700 jobs were created.