Canadian Dollar And Business Outlook

By Commodity News Service Canada

WINNIPEG, September 8 (CNS Canada) The Canadian dollar weakened against its US counterpart Thursday morning, down with reports from both countries.

The US Labor Department reported the number of Americans filing for unemployment benefits fell unexpectedly to 259,000 last week.

Jobless claims in the US fell 4,000 from last week which marks the 79th consecutive week of claims below 300,000, a level which indicates a strong labour force. The data propped up the US dollar, which in turn weighed on the loonie.

The nod in the direction of a healthy US labour market further peaked investors’ interest in when the US Federal Reserve could raise interest rates, however the market remains indecisive and directionless amid uncertainty.

On the other side of the border, Canada’s industrial capacity utilization rate fell in the second quarter to its lowest level since late 2010, according to Statistics Canada.

Industries in Canada operated at 80 per cent of their production capacity in the second quarter, down from 81.4 per cent in the previous quarter, weighing on the loonie. However, economists say the capacity utilization rate was still above market expectations, which was 79.6 per cent.

At 9:04 CDT Thursday, the Canadian dollar was at US$0.7737 or US$=C$1.2925, which compares with Wednesday’s North American close of US$0.7752 or US$1=C$1.2900.

The TSX was down 26.87 points, or 0.18 per cent, at 9:04 CDT Thursday morning to sit at 14,769.88.