RTTN: Canadian Dollar Slides Against Major Rivals In Early New York
(RTTNews) - The Canadian dollar slumped to multi-week lows against the US dollar and the Japanese yen in early New York trading on Wednesday as crude oil prices fell below the $78 barrel mark.
The price of crude oil edged down $1.06 to $77.96 per barrel in the session as traders expect tomorrow's Energy Information Administration data on weekly crude oil inventories on US energy stockpiles to show an increase, which would indicate weaker demands. The inventories report is due for release on Thursday, one day later than normal owing to a US holiday on Monday.
On Tuesday, the Organization of the Petroleum Exporting Countries said in its January report that oil demand in 2010 was forecast to grow by 0.8 million barrels per day to average 85.1 million barrels per day.
In economic news, the rate of inflation in Canada remained within targets levels set by the Bank of Canada in December, as consumer prices fell very slightly from the previous month.
On a seasonally adjusted monthly basis, the CPI fell 0.3% from November to December, after rising 0.5% from October to November, according to data released today by Statistics Canada.
On an annual basis, consumer prices rose 1.3% in the 12 months to December, following a 1.0% increase in November. The agency noted that December's on-year increase was the largest since February 2009.
In a separate report, the Statistics Canada said that the Canadian manufacturing sales edged up 0.1% to $42.6 billion in November. Economists were expecting a much larger increase of 1.4%, after October's increase of 2%.
Yesterday, the Bank of Canada kept its overnight lending rate at 0.25 percent and repeated its conditional commitment to maintain that level until the end of the second quarter.
The Canadian dollar dropped more than 1.2 percent to a 16-day low of 1.0491 against the US dollar by 9:35 am ET from yesterday's close of 1.0316. On the downside, support is likely to be seen around the 1.0590 level for the loonie. Currently, the greenback-loonie pair is trading at 1.0485.
In the U.S., the Labor Department said its producer price index edged up by 0.2 percent in December following an unrevised 1.8 percent increase in November. Economists had been expecting prices to come in unchanged after the sharp jump in the previous month.
Excluding the changes in food and energy prices, core producer prices were unchanged in December after increasing by 0.5 percent in the previous month. Core producer prices had been expected to edge up by 0.1 percent.
