The Canadian dollar edged lower against its U.S. counterpart on Thursday as oil prices fell and investors weighed domestic data showing some weakening in activity.
Canadian wholesale trade fell by 2.1 per cent in July from June, the biggest decline since April last year, Statistics Canada said. The decline was driven by lower sales in the building materials and supplies subsector as lumber prices fell sharply.
Separate data, from the Canadian Mortgage and Housing Corporation, showed housing starts fell 3.9 per cent in August compared with the previous month as both multiple urban starts and single urban starts declined.
“Momentum (in housing starts) has been moderating after unprecedented strength earlier in the year,” Shelly Kaushik, an economist at BMO Capital Markets, said in a note.
Foreign investors are growing more worried that Canada’s federal election on Monday could result in a deadlock that hampers Ottawa’s response to the COVID-19 pandemic and further slows the economic recovery from the crisis.
The price of oil, one of Canada’s major exports, fell from a multi-week high a day earlier as the threat to U.S. Gulf production from Hurricane Nicholas receded.
U.S. crude prices were down 0.6 per cent at $72.2 a barrel, while the Canadian dollar was trading 0.1 per cent lower at 1.2651 to the greenback, or 79.05 U.S. cents. The currency traded in a range of 1.2616 to 1.2654.
Canadian government bond yields were higher across a steeper curve, tracking the move in U.S. Treasuries after data showed an unexpected increase for U.S. retail sales in August.
The 10-year rose 4.9 basis points to 1.268 per cent, its highest level since Aug. 26.
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