Canadian dollar slides to 2-week low as oil prices tumble - Reuters News
Canadian dollar slides to 2-week low as oil prices tumble - Reuters News
Canadian dollar falls 0.5% against the greenback
Loonie touches its weakest since Aug. 26 at 1.3177
Price of U.S. oil decreases 6.5%
Canadian bond yields ease across much of a flatter curve
TORONTO, Sept 8 (Reuters) - The Canadian dollar fell to a near two-week low against its broadly stronger U.S. counterpart on Tuesday, as oil prices tumbled and a selloff in technology shares weighed on investor sentiment.
World shares .WORLD struggled as doubts about a recovery in tech stocks lingered after last week's rout. (Full Story)
Canada runs a current account deficit and is a major exporter of commodities, including oil, so the loonie tends to be sensitive to the global flow of trade and capital.
U.S. crude CLc1 prices were down 6.5% at $37.19 a barrel, pressured by concerns that a recovery in demand could weaken as coronavirus infections flare up around the world. (Full Story)
The Canadian dollar CAD= was trading 0.5% lower at 1.3162 to the greenback, or 75.98 U.S. cents. The currency touched its weakest intraday level since Aug. 26 at 1.3177.
The Bank of Canada will leave its policy interest rate at 0.25% on Wednesday and likely follow the U.S. Federal Reserve's path of reviewing its current inflation-targeting framework to protect the economy from the fallout of the coronavirus, a Reuters poll showed. (Full Story)
On Friday, data showed that Canada added 245,800 jobs in August, the fourth consecutive monthly increase. (Full Story)
Canadian government bond yields were lower across much of a flatter curve in sympathy with U.S. Treasuries on Tuesday. The 10-year CA10YT=RR fell 3.5 basis points to 0.562%.
Euro zone GDP revised up, but still a record drop - Reuters News
BRUSSELS, Sept 8 (Reuters) - The euro zone economy declined by slightly less than initially estimated in the second quarter, but the drop was still the sharpest ever as consumer spending caved in due to COVID-19 restrictions.
Gross domestic product (GDP) fell by 11.8% from the previous quarter and by 14.7% year-on-year, data from the European statistics agency Eurostat showed on Tuesday.
That compared with initial estimates of respectively 12.1% and 15.0% reported at the end of July. (Full Story)
The contraction in the April-June period, during with COVID-19 restrictions were in place across the continent, was the steepest in a data series that began in 1995.
In the first three months of this year, the contraction was already 3.7% quarter-on-quarter and 3.2% year-on-year.
The sharpest second-quarter declines from the previous quarter were in Spain, Greece, Portugal and France.
Household spending had the greatest negative influence, cutting 6.6 percentage points from growth, followed by gross fixed capital formation at minus 3.8 points. Net trade, government spending and inventory changes also had a negative impact.
Eurostat also reported that employment fell by 2.9% in the second quarter, also the sharpest decline since records began in 1995, after a 0.3% drop in the first three months of 2020.
The impact was moderated by government support schemes, but the decline in hours worked, at 12.8%, was more pronounced.
German July trade figures point to slow recovery - Reuters News
By Joseph Nasr and Rene Wagner
BERLIN, Sept 8 (Reuters) - German exports remained far below their pre-crisis levels in July despite a 4.7% increase during the month, data published on Tuesday showed, adding to signs that Germany's economic recovery from the coronavirus will be slow.
Imports rose by only 1.1% on the month, taking the seasonally adjusted trade surplus to 18 billion euros, the Federal Statistics Office said.
Economists expect Europe's biggest economy to show a return to growth in the third quarter, helped by higher activity levels domestically and in some of Germany's main trading partners after lockdowns were lifted from April.
Yet weak demand from major economic peers still grappling with the pandemic, such as the United States, is holding back a stronger recovery.
The data showed that exports to the United States were 17% lower in July year-on-year. Exports to China, however, which is experiencing a more pronounced recovery than the United States, were only 0.1% lower.
"While today's numbers are good news for our call of surging GDP growth .... (in the second half of the year) and suggest that the export sector is flourishing again, we should not get carried away by these numbers," said Carsten Brzeski, euro zone chief economist at ING.
He added: "They are still part of the mechanical rebound. In fact, the German export sector is still suffering from structural challenges including trade tensions, Brexit and global supply chain disruptions as well as difficulties among its main trading partners to cope with the virus."
The German economy contracted by a record 9.7% in the second quarter as household spending, company investment and trade all collapsed at the height of the COVID-19 pandemic.
Exports were in July still more than 12% lower than in February.
Trade tensions, uncertainties linked to Britain's departure from the European Union and an automotive sector struggling to adapt to electrification had suppressed demand for German goods and services before the pandemic, setting off a recession in the manufacturing sector.
The COVID-19 crisis makes a full recovery difficult.
The VDMA business association said on Tuesday that German engineering firms expected production to decline by 17% this year before growing by only 2% in 2021 - barring both a second coronavirus wave and resurgent trade disputes.
