Canadian dollar falls to three-week low on sliding oil and gold prices - InfoNews

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Canadian dollar falls to three-week low on sliding oil and gold prices

The Toronto Stock Exchange Broadcast Centre is shown in Toronto on Friday June 28, 2013. THE CANADIAN PRESS/Aaron Vincent Elkaim
March 28, 2019 - 2:14 PM

TORONTO - Canada's main stock index bounced higher Thursday but lower energy and gold prices drove the loonie to a three-week low.

The Canadian dollar traded for an average of 74.47 cents US after recovering from falling to its lowest point since early January. The loonie traded at an average of 74.55 cents US on Wednesday.

The loonie was hurt by weaker commodity prices, says Anish Chopra, managing director with Portfolio Management Corp.

Crude oil prices mostly recovered morning losses after U.S. President Donald Trump called for OPEC to raise supply to drive prices lower.

"Very important that OPEC increase the flow of Oil. World Markets are fragile, price of Oil getting too high. Thank you!" Trump tweeted.

The May crude contract was down 11 cents at US$59.30 per barrel and the May natural gas contract was down 0.7 of a cent at US$2.71 per mmBTU.

Precious metals prices also dropped with the June gold contract losing US$21.60 at US$1,295.30 an ounce. The May copper contract was up 0.95 of a cent at US$2.87 a pound.

"A U.S. president asking OPEC to increase production would generally be negative for crude oil prices so that would have an impact on the Canadian dollar and so would gold being down, and even silver's down a little bit too," Chopra said in an interview.

He expects the Canadian dollar could weaken further with additional downward movement by oil and metals and weakness in Canadian real estate.

North American markets all rose with the S&P/TSX composite index closing up 22.96 points to 16,155.49, reversing Wednesday's losses, after hitting an intraday high of 16,173.19.

In New York, the Dow Jones industrial average was up 91.87 points at 25,717.46. The S&P 500 index was up 10.07 points at 2,815.44, while the Nasdaq composite was up 25.79 points at 7,669.17.

The Toronto market was helped by gains in the technology, industrials and consumer discretionary sectors.

Materials were the weakest, followed by utilities and health care.

Centerra Gold Inc. and Eldorado Gold led mining share decreases while cannabis stocks moved lower led by a 19 per cent drop by CannTrust Holdings after it missed analyst forecasts in its fourth quarter.

A report confirming a slowdown of the U.S. economy in the fourth-quarter had limited impact because the data is old considering second-quarter results are forthcoming.

"But I think it's certainly validated investor concerns at the end of last year when markets had gone down quite a bit...and now you've got confirmation that it certainly did slow," added Chopra.

He said investors remain concerned about a slowing global economy with growth of both the U.S. and Chinese economies falling and risks remaining with Brexit and U.S.-China trade even as U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin arrived in Beijing for a new round of talks with Chinese officials.

"When you look globally, the world's two biggest economies are slowing and you've had evidence of that over the last number of months."

Companies in this story: (TSX:CG, TSX:ELD, TSX:GSPTSE, TSX:CADUSD=X)

News from © The Canadian Press, 2019
The Canadian Press

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