Skip to main content

The Globe and Mail

Loonie ends higher despite signs of commodity weakness

Canadian dollars.

Jeff McIntosh/THE CANADIAN PRESS

The Canadian dollar ended higher Thursday despite weaker-than-expected manufacturing data from China.The loonie climbed 0.73 of a cent to 97.14 cents (U.S.).

HSBC reported that its preliminary Purchasing Managers Index fell to a seven-month low of 49.6 in May from April's 50.4. Numbers below 50 indicate that activity is contracting. Analysts had expected a more modest decline to 50.3.

The disappointing data had spurred concerns over the future outlook for commodities, like copper.

Story continues below advertisement

"People, I think, are selling equities and taking comfort in either bonds or currencies because the Canadian dollar was weaker [Wednesday]," said John Tsagarelis, a portfolio manager at Manulife Asset Management.

But he added that if the Chinese data continue to worsen, the Canadian dollar will likely follow.

"Given what's happening in China, I can't imagine if commodities are weakened, the Canadian dollar will stay where it is," Mr. Tsagarelis said.

The loonie has been declining against the strong U.S. dollar, with some expecting the currency to stray further from parity, a position it was close to just a few weeks ago.

On the commodities front, June gold bullion continued to show strength, rising $24.40 to $1,391.80 an ounce. The July crude contract was down 3 cents to US$94.25 a barrel, while July copper fell 8 cents to $3.30 a pound.

Report an error
Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.