Canadian dollar falls below 90 cents US against strong U.S. greenback
Posted September 25, 2014 8:55 am.
This article is more than 5 years old.
TORONTO – The Canadian dollar headed lower Thursday, pressured by a stronger U.S. dollar and a weaker overall global economic outlook.
The loonie declined 0.41 of a cent to 90.03 cents US.
The U.S. greenback has been steadily making gains against other major currencies due to the widely held belief that the U.S. Federal Reserve is getting closer to a rate hike.
“The theme driving the U.S. dollar continues to be a strengthening U.S. economy relative to other economies,” Rahim Madhavji of Knightsbridge Foreign Exchange said in a note.
“However, with Canada’s economy closely tied to the U.S. economy, over time Canada should eventually benefit from a strengthening U.S. economy.”
“What people can expect is a wide and volatile range for the loonie,” said
Brian Belski, chief investment strategist with BMO Capital Markets, said investors should expect a “wide and volatile” range for the loonie.
“But it shouldn’t dip lower than 85 cents US,” he said.
Although the overall outlook for the U.S. remains upbeat, figures released Thursday showed that some weakness remains.
The U.S. Commerce Department says business orders for long-lasting manufactured goods fell by a record 18.2 per cent in August, dragged lower by a plunge in demand for commercial aircraft.
It was similarly disappointing news from the U.S. Labor Department, which said the number of people applying for unemployment benefits in the U.S. increased last week after falling sharply two weeks ago. Weekly applications rose by 12,000 to a seasonally adjusted 293,000 last month.
In commodities, the November crude oil contract dipped 27 cents to US$92.53 a barrel, December gold bullion added $2.40 at US$1,221.90 an ounce and the December copper contract fell two cents to US$3.03 a pound.
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