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Canadian dollar, USA index futures rise despite another loss on Shanghai market
Posted On Jan 13 2016
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Canada’s main stock market in Toronto bounced back into positive territory on Tuesday after falling for nine consecutive sessions, though both oil prices and the Canadian dollar hit 12-year lows. The loonie appears to have found a temporary bottom after threatening to go below the 70-cent level for the first time since 2003. Five of the TSX index’s eight main sectors ended lower.
Stock boards were seas of green on Tuesday, with the S&P/TSX composite index up by more than 100 points shortly after opening, the Dow Jones Industrial Average up by nearly 200, and the broader S&P up by more than 1 per cent. Vancouver-based B2Gold Corp. lost 10.45 percent to 1.20 Canadian dollars a share. That’s leading to further declines in oil prices, and that obviously is having an impact on the domestic market as well as global markets as a whole.
The slump in China and its knock-on effects on commodity prices, especially oil, continued to drive down both the dollar and the TSX.
The Canadian dollar was at 71.02 cents U.S., up 0.34 cent from Friday’s close.
“Sentiment on the Prairies deteriorated further, but weakening investment intentions are now evident in other regions as well”, TD Economics’ Leslie Preston noted. The world’s biggest gold producer by market value says it will have to look more and more for large deposits outside the Americas as its CEO lamented the rarity of such deposits Monday. “It does not paint a very positive picture about hiring or investment over the next 12 months”.
The Canadian housing market also showed signs of cooling in December, with housing starts coming in lower than expected despite warm weather and a solid pace throughout 2015.
Meanwhile, Finance Minister Bill Morneau told Montreal reporters that despite the recent drop in oil prices and the country’s currency, the federal government will continue their plan to invest into the economy.
The Canadian dollar closed at 0.7013 US dollar, compared with Monday’s closing rate of 0.7031 USA dollar.
