Canadian Manufacturing

Oil continues to drag down loonie; economists look ahead to jobs report

Prices have collapsed since June, falling 55 per cent amid a glut of supply. But demand has also softened amid slowing growth in China and Europe



OTTAWA—The Canadian dollar was lower January 6 as crude oil prices moved well below the key US$50 a barrel mark.

The loonie was down 0.09 of a cent to 85.02 cents US.

February crude contracts in New York dropped $1.08 to US$48.96 a barrel, the fourth straight day of declines and the lowest level since April 2009.

Prices have collapsed since June, falling 55 per cent amid a glut of supply. But demand has also softened amid slowing growth in China and Europe.

Elsewhere on commodity markets, metals were mixed while February gold gained $5.30 to US$1,209.30 an ounce while March copper was unchanged at US$2.76 a pound.

Meanwhile, there was encouraging data from the world’s second-largest economy. HSBC’s Chinese services sector purchasing managers index unexpectedly showed expansion, rising 0.4 of a point to a three month high of 53.4. BMO Capital Markets also observed that “there were reports that China’s government gave the go ahead to proceed with US$1.1 trillion worth of infrastructure spending on 300 projects, to help boost growth.”

Traders also looked ahead to the latest employment data from Canada and the U.S. on Friday.

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.

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