The Canadian dollar staged a sharp fall against its major counterparts on Thursday morning in New York as crude oil futures continued their slump from Wednesday. The loonie plunged to a fresh 10-week low against the euro and a 10-day low versus the US dollar and Japanese yen.
Crude prices headed closer to $66 per barrel today on demand worries. As of 10:30 am ET, Benchmark crude for November delivery tumbled $2.12 to $66.85 per barrel on the New York Mercantile Exchange. Prices touched as low as 66.72 earlier in the morning.
The U.S. Energy Information Administration's weekly data showed yesterday that commercial stockpiles of crude gained 2.8 million barrels against analyst expectations for a 2.25 million barrel fall.
Extending its 3-day losing streak, the Canadian dollar plunged to a 10-day low of 83.66 against the Japanese yen by 10:20 am ET. The loonie has lost 1.8 percent against the yen thus far this day and a move below the key 0.83 support level may lead the pair to its lowest in more than 2-month. The Canadian dollar closed yesterday's deals at 85.0 against the yen.
The yen gained in the Asian session as Japan posted a merchandise trade surplus of 185.7 billion yen in August The figure beat analyst expectations for a surplus of 157 billion yen following the revised 377.9 billion yen surplus in July. Trade imports were down 41.3 percent on year in August, while exports were down 36 percent.
The Canadian dollar also dropped to a 10-day low of 1.0894 against the US dollar by 10:20 am ET, down 1.35 percent from yesterday's close of 1.0747. On the downside, the Canadian currency may find target around the 1.094 level.
The greenback gained after the US Labor Department said in a report that initial jobless claims in the week ended September 19th unexpectedly decreased compared to the previous week.
Jobless claims fell to 530,000 from the previous week's revised figure of 551,000. Economists had been expecting jobless claims to edge up to 550,000 from the 545,000 originally reported for the previous week.
At the same time, existing home sales unexpectedly fell in August, according to a report released by the National Association of Realtors today.
Existing home sales fell 2.7 percent to an annual rate of 5.10 million units in August from a 5.24 million unit rate in July. The decrease came as a surprise to economists, who had expected existing home sales to increase to a 5.35 million unit rate.
The Canadian dollar plummeted to 1.6021 against the euro by 10:20 am ET, its lowest level since mid-July. If the loonie declines further, support is likely to be seen around the 1.609 level.
The loonie has lost more than 1.3 percent against the euro thus far today and the pair is presently quoted at 1.5993. The pair closed Wednesday's deals at 1.5836.
In economic news from the euro-area, a monthly survey from the Munich-based Ifo Institute for Economic Research showed that German business confidence in September rose to 91.3 from 90.5 in August. The expected reading was 92.
Italy's total trade balance turned to a surplus of EUR 4.10 billion in July from a deficit of EUR 639 million in June, the statistical office Istat said today. Exports dropped 20.6% year-on-year, while imports fell for the ninth straight month by 27.6% year-on-year after a 21.3% fall in June.
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