Loonie declines as oil prices weaken, greenback strengthens on Greek concerns

By , on January 5, 2015


ShutterStock
ShutterStock

The Canadian dollar moved lower Monday while the greenback advanced amid another round of worry connected with elections in Greece later this month.

The loonie was also depressed by falling oil prices and declined 0.15 of a cent to 84.87 cents US, the lowest since May 2009.

The U.S. currency strengthened and the euro fell to the lowest level since March 2006, amid fresh doubts about whether Greece will exit the eurozone following elections later this month.

Traders are weighing the outcome of upcoming elections in Greece that might be won by the anti-austerity Syriza party. Such a victory would raise doubts about whether the country will stick to the terms of its international bailout and stay in the euro bloc. Germany has warned Greece against reneging on the bailout conditions should Syriza win this month’s general election.

Greek jitters helped push the euro down as low as US$1.1864 earlier Monday morning.

Meanwhile, February crude in New York slid $1.55 to US$51.14 a barrel, continuing the steady decline from summertime highs of around US$110 a barrel as markets deal with a huge oversupply issue. The strengthening greenback also weighed on prices since a rising U.S. currency makes dollar-denominated crude more expensive to holders of other currencies.

Elsewhere on the commodity markets, March copper fell six cents to US$2.76 a pound while February bullion added 70 cents to US$1,186.90 an ounce.

On the U.S. economic calendar for this week, investors looked to the latest reports on auto sales during the day.

Later in the week, they will digest U.S. November factory orders data, purchasing managers data for last month covering the manufacturing and service sectors and the release of the minutes from last month’s Federal Reserve meeting for indications of when the central bank might move to hike rates later this year.

Markets will also digest Canadian data including merchandise trade, housing starts and building permits.

But it is the latest readings on employment that will focus markets.

Economists expect that the American economy created about 240,000 jobs during December and that the jobless rate ticked slightly lower.

In Canada, it is expected Statistics Canada will report that the economy cranked out about 10,000 jobs, after losing a similar amount during November.