Canadian Dollar Falls on Cratering Oil Prices, Weaker Manufacturing Data

The Canadian dollar is tumbling on Thursday, thanks to crude oil prices slipping below the key $70 threshold and weak manufacturing data. The loonie had surged to a 11-day high on Wednesday before retreating against several other currencies.

According to the US Energy Information Administration (EIA), domestic crude inventories climbed by 6.5 million barrels for the week ending October 12, which is higher than the market forecast of 1.88 million barrels. Gasoline supplies decreased by two million barrels, while distillate stockpiles declined by 800,000 barrels.
November West Texas Intermediate (WTI) crude futures plunged $1.16, or 1.66%, to $68.59 per barrel on the New York Mercantile Exchange. Oil prices fell as much as 3% before paring some of those losses.
Crude oil continues to be one of Canada’s biggest exports, and the economy is sensitive to the trends in the international crude market.
Statistics Canada reported that manufacturing sales dropped 0.4% to $58.6 billion in August, less than the 0.6% analysts had anticipated. Sales were down in seven of the 21 industries monitored by the statistics agency, accounting for a little more than half of the national manufacturing sector. The motor vehicle industry led the way with sales plummeting 8.3% to $4.9 billion.
Traders will now look ahead to the consumer price index (CPI) and Core Retail Sales on Friday.
The loonie took another hit after the Federal Reserve released minutes from its latest Federal Open Market Committee (FOMC) policy meeting. The minutes Federal Reserve from majority of the members pertaining to raising interest rates until the US economy cools down. The central bank is expected to pull the trigger on another rate hike in December.
This comes as the Bank of Canada (BOC) is widely expected to raise rates by 25 basis points at next week’s monetary policy meeting.
The USD/CAD currency pair rose 0.18% to 1.3047, from an opening of 1.3021, at 14:28 GMT on Thursday. The EUR/CAD advanced 0.17% to 1.5000, from an opening of 1.4972.

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