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Canadian dollar dips as retail sales disappoint

Canadian dollar


The Canadian dollar closed lower Thursday amid a disappointing read on retail sales.

The loonie slipped 0.07 of a cent to $1.0028 (U.S.) as Statistics Canada reported that sales edged up just 0.1 per cent to $39.1-billion (Canadian) in September.

That came on top of increases in the previous two months. But economists had expected retail sales to rise by 0.5 per cent during the month.

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The loonie had been higher earlier in the morning amid other data showing that the Chinese manufacturing sector moved back into expansion territory in November for the first time in 13 months.

HSBC Corp.'s purchasing managers' index rose from 49.5 in October to 50.4 in November. Any reading over 50 indicates expansion. The PMI index measures overall manufacturing activity by surveying numerous indicators including orders, employment and actual production.

The HSBC reading was particularly good news for the global economy, which is still recovering slowly from the 2008 financial crisis and recession.

Copper prices had advanced after the report but by late afternoon the December contract was unchanged at $3.51 (U.S.) a pound in electronic trading on the New York Mercantile Exchange. Copper is viewed as an economic bellwether as it is used in so many applications and China is the world's biggest consumer of the metal.

The December gold bullion contract was ahead $1.30 to $1,729.50 an ounce.

Oil prices dipped after running up strongly in the past few days on concerns that fighting between Israel and Hamas could spread, jeopardizing shipments of oil from the Mideast.

The January crude contract was off 26 cents at $87.12 a barrel.

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Meanwhile, Finance Minister Jim Flaherty says don't expect any "risky new spending schemes" or tax increases in the next federal budget, which is to be tabled in the new year. He told a business audience in Toronto his government will not "engage in endless spending to increase deficits."

Mr. Flaherty says he's prepared to be flexible if needed, but his plan is to stick to "balanced budgets and low taxes."

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