Strong greenback slams loonie, TSX
TORONTO — A stronger U.S. dollar pushed Canada’s main stock market lower and hurt commodity prices in the first day of trading since the holiday weekend.
The Canadian dollar closed at its lowest level in more than a month Tuesday, closing at 75.86 cents US compared with an average of 76.60 cents US on Friday.
Everything seems to be taking their cues from the U.S. dollar, said Craig Jerusalim, portfolio manager at CIBC Asset Management.
“A stronger U.S. dollar which is bad for emerging markets, not good for trade, commodities are all weaker and as a result Canadian equity markets are in the red for the most part.”
The S&P/TSX composite index was down 101.58 points at 16,161.30, after hitting a low of 16,152.17 on 239.4 million shares traded. That adds to a 108.67-point decline on Friday amid uncertainty about Canada’s trade talks with the United States.
The only sectors that rose on the day was cannabis-heavy health care that gained 5.15 per cent and information technology, up 0.10 per cent.
The others were in negative territory, led by gold and materials, down 2.5 and two per cent, respectively.
The Bank of Canada isn’t expected to increase interest rates today, but markets will be watching for any word coming out of the resumption of NAFTA talks between Canada and the U.S., said Jerusalim.
He said the loonie will suffer if there is no deal and will drift lower until there is more concrete news on the continental free-trade pact.
“If there is a deal, you could see an immediate snap-back in the loonie, assuming that the terms are not overly cumbersome, but the initial reaction will be that getting any deal signed would be positive for the Canadian dollar.” he said.
In New York, the Dow Jones industrial average was down 1.48 points at 25,963.34. The S&P 500 index was down 4.19 points at 2,897.33, while the Nasdaq composite was down 17.28 points at 8,092.26.
Amazon.com Inc. shares were up slightly as the online retailer became the second company after Apple Inc. to pass $1 trillion US in market capitalization.
Crude prices rose strongly earlier in the day on weather-related disruptions in the Gulf of Mexico and exports from Iran being affected by the impending re-imposition of sanctions.
But the October crude contract closed was up just seven cents at US$69.87 per barrel. The October natural gas contract was down 9.3 cents at US$2.82 per mmBTU.
The December gold contract was down US$7.60 at US$1,199.10 an ounce and the December copper contract was down 6.9 cents at US$2.60 a pound.