The Canadian dollar was holding steady ahead of trading on North American stock markets.
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The Toronto Stock Exchange took at triple-digit plunge early Tuesday amid concern about the strength of China’s economy. “Certainly oil hitting new lows is not good for our market”, said Philip Petursson, managing director, capital markets and strategy, at the portfolio advisory group at Manulife Asset Management.
The S&P/TSX composite index was down 64.10 points at 14,213.78 at mid-afternoon as the Toronto market has now declined in four of its last five sessions.
In other commodities, natural gas edged up half a cent to US$2.71 per thousand cubic feet while copper lost a penny to US$2.28 a pound.
Volatility at the beginning of the summer after the Bank of Canada announced another cut to its benchmark interest rate, and a slide in oil to new lows, could have caused many market participants to delay their vacations, he said. The recently signed deal on Iran’s nuclear program loosened sanctions on that country’s oil shipments, which will help keep prices low, Orengo said.
The Dow Jones industrial average ended the day down 33.84 points at 17,511.34, while the Nasdaq fell 32.35 points to 5,059.35 and the S&P 500 declined 5.52 points to 2,096.92.
The commodity-sensitive loonie was down 0.29 of a U.S. cent at 76.30 cents US after having fallen below the 76-cent mark earlier in the session.
The price of a barrel of oil has more than halved in year, falling from highs above $110 in July 2014. China is the world’s biggest consumer of commodities and Canada’s second-largest trading partner.
“As you get more negativity about oil and it feeds on itself, people go away”, he said.
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“I’d say the basics in Canada relative to U.S. suggests the Canadian greenback ought to keep at present ranges or decrease”, he stated.
