Canadian Dollar And Business Outlook

By Commodity News Service Canada

WINNIPEG, June 14 (CNS Canada) The Canadian dollar weakened against its US counterpart Tuesday morning after a disappointing net worth report.

Canada’s national net worth declined 1.5 per cent, or C$144.7 billion, to C$9,571 billion at the end of the first quarter, according to Statistics Canada. This was mainly due to a decrease in the market value of financial assets held abroad, as Canada’s net foreign asset position fell in the first quarter.

Household sector net worth at market value rose 1.2 per cent in the first quarter to C$9,633 billion and financial assets increased 0.7 per cent, however it was the weakest first quarter growth since 2009, Statistics Canada reported. Driven by gains in the value of real estate, the growth of non-financial assets (up 1.5 per cent) outpaced that of financial assets. As a result, the ratio of financial assets to non-financial assets decreased to 111.4 per cent.

Markets continue to be apprehensive while awaiting the US Federal Reserve policy meeting and a referendum on Britain’s European Union Membership scheduled for June 23.

The Federal Open Market Committee (FOMC) will start its two day meeting on Tuesday to decide whether the US economy has recovered enough to be able to absorb an interest rate hike.

At 8:46 CDT Tuesday, the Canadian dollar was at US$0.7785 or US$=C$1.2845, which compares with Monday’s North American close of US$0.7808 or US$1=C$1.2807.

The TSX was down 4.71 points, or 0.03 per cent, at 8:46 CDT Tuesday morning to sit at 13,989.17.