Canadian dollar dips as investors focus on Fed testimony - Reuters News
Canadian dollar dips as investors focus on Fed testimony - Reuters News
- Canadian dollar weakens 0.2% against the greenback
- Price of U.S. oil falls 0.6%
- Canada-U.S. 2-year spread widens to 21 basis points
TORONTO, June 22 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Tuesday as oil prices fell and attention turned to testimony by Federal Reserve Chair Jerome Powell, with the loonie giving back some of the previous day's rally.
The loonie CAD= was trading 0.2% lower at 1.2391 to the greenback, or 80.70 U.S. cents. On Monday, it touched its weakest level since April 26 at 1.2485 before recovering to end up 0.8%, its biggest gain in nearly seven weeks.
Powell will testify in a congressional hearing likely to focus on how the U.S. central bank is balancing rising inflation risks with its promise to ensure the economy recovers all the jobs lost after the onset of the coronavirus pandemic. (Full Story)
Canada is a major producer of commodities, including base metals and oil, which have benefited from Fed stimulus.
U.S. crude oil futures CLc1 fell 0.6% as OPEC+ begins discussions on raising oil production, but a strong demand outlook limited the decline. (Full Story)
Canada's retail sales report for April is due on Wednesday, which could offer clues on the strength of the domestic economy.
Canadian retailers are readying for a post-pandemic rebound as consumers emerge from lockdowns and open their wallets, but higher costs are eroding their profit margins and fanning inflationary pressures. (Full Story)
Canadian government bond yields were little changed across the curve, with the 10-year CA10YT=RR trading at 1.413%.
The gap between Canada's 2-year yield and its U.S. equivalent widened by 0.7 basis points to about 21 basis points in favor of the Canadian bond, its widest spread since March last year.
U.S. existing home sales decline as prices surge to record high - Reuters News
WASHINGTON, June 22 (Reuters) - U.S. home sales fell for a fourth straight month in May as record high prices amid low inventory frustrated potential buyers, a trend that could persist for while, with builders unable to deliver more houses because of expensive lumber.
Existing home sales dropped 0.9% to a seasonally adjusted annual rate of 5.80 million units last month, back to their pre-pandemic level, the National Association of Realtors said on Tuesday. Sales fell in the Northeast, West and the densely populated South, but rose in the Midwest.
Economists polled by Reuters had forecast sales falling to a rate of 5.72 million units in May.
Home resales, which account for the bulk of U.S. home sales, surged 44.6% on a year-on-year basis. The annual increase was, however, distorted by the plunge in sales in May 2020, when the economy was reeling from mandatory shutdowns of non-essential businesses to slow the first wave of COVID-19 cases.
The COVID-19 pandemic fueled demand for houses as millions of Americans switched to remote work and schooling. Supply was already tight before the pandemic. Some homeowners were reluctant to list their homes because of fear of contracting the virus from potential buyers touring their properties.
Some elderly Americans likely delayed downsizing due to the pandemic. The virus has disrupted labor supply at saw mills and ports, causing shortages of lumber and other raw materials. That is limiting builders' ability to ramp up construction of new homes. The government last week reported a moderate rebound in homebuilding in May and a drop in permits. (Full Story)
With inventory tight, bidding wars are rising, threatening to price some first-time buyers out of the market. The median existing house price accelerated a record 23.6% from a year ago to an all-time high of $350,300 in May.
Economists do not believe another housing bubble is developing, noting that the surge is being mostly driven by a mismatch between supply and demand, rather than poor lending practices, which triggered the 2008 global financial crisis. But the rapidly rising prices could feed inflation.
There were 1.23 million previously owned homes on the market in May, down 20.6% from a year ago. At May's sales pace, it would take 2.5 months to exhaust the current inventory, down from 4.6 months a year ago. A six-to-seven-month supply is viewed as a healthy balance between supply and demand.
Properties typically remained on the market for 17 days in May, down from 26 days in May 2020. Eighty-nine percent of the homes sold last month were on the market for less than a month. First-time buyers accounted for 31% of sales in May, down from 34% a year ago.
Euro zone consumer confidence rises to -3.3 in June - Reuters News
June 22 (Reuters) - Euro zone consumer confidence rose by 1.8 points in June from the May number, figures released on Tuesday showed.
The European Commission said a flash estimate showed euro zone consumer morale improved to -3.3 this month from -5.1 in May.
Economists polled by Reuters had expected a rise to -3.0.
In the European Union as a whole, consumer sentiment rose by 1.5 points to -4.5.
UK CBI manufacturing order books +19 in June vs +17 in May - Reuters News
LONDON, June 22 (Reuters) - Following are tabulated results from the latest survey released on Tuesday by the Confederation of British Industry (CBI) about trends in British manufacturing:
CONSENSUS FORECAST: Total order book +18
The balance is the difference between the percentage of manufacturers reporting an increase or above normal and those reporting a decrease or below normal. Output and domestic price expectations are for the next three months.
Data was collected by the CBI between May 25 and June 11 from 304 manufacturers.
