By Commodity News Service Canada
WINNIPEG, September 23 – The Canadian dollar continued to drift down towards the 90 cents US mark on Tuesday, undermined by disappointing economic data out of Europe, analysts said.
Markit’s purchasing managers’ index for the euro zone dropped to 52.3 in September, the lowest in nine months, and below 52.5 seen in August.
The Canadian dollar closed at US$0.9034 or US$1=C$1.1031 on Tuesday, which compares with Monday’s North American settlement of US$0.9065 or US$1=C$1.1031.
Soft Canadian retail sales data was also bearish. Statistics Canada said retail sales were down 0.1 per cent to C$42.5 billion in July, following six consecutive months of gains.
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Further downward pressure came as traders were avoiding riskier assets due to concerns about problems in the Middle East, brokers noted.
However, positive Chinese manufacturing data, and the resulting strength in commodity prices, such as crude oil, and gold, provided some support for the loonie.
Canadian bonds ended higher, as investors were buying safe-haven assets in light of concerns about problems in the Middle East, market watchers said.
The two-year bond yielded 1.126% late Tuesday, from 1.158% late Monday. The 10-year bond yielded 2.173%, from 2.224%. Bond yields fall as their prices rise.
