TORONTO - The Canadian dollar was lower Monday as the American currency appreciated in the wake of Friday's soft U.S. jobs report and concern increased on the markets over how the Scottish referendum on independence may turn out.
The loonie was down 0.44 of a cent to 91.46 cents US after data released Friday raised another round of speculation about when the U.S. Federal Reserve may hike interest rates. Markets generally expect the Fed to move around the middle of 2015.
U.S. employers added just 142,000 jobs in August, ending a six-month streak of hiring above 200,000 and posting the smallest gain in eight months.
The data was also disappointing in Canada as 11,000 jobs were lost during August.
Traders sharpened their focus on the United Kingdom after a YouGov poll showed rising support for Scottish independence. The British pound dropped to a 10-month low against the greenback (US$1.6103) with markets getting increasingly concerned that the gap between the yes and no sides has narrowed considerably, just days before the Sept. 18 referendum.
"The abruptness of the shift in one survey should be viewed with caution, but nonetheless reinforces our long-held view that Scotland's independence referendum is a serious event risk," said a commentary from Barclays Research.
The loonie also lost ground amid a much better than expected report on building permits. Statistics Canada said municipalities issued building permits worth $9.2 billion in July, up 11.8 per cent from June and the fourth consecutive monthly advance. The increase in July was mainly attributable to higher construction intentions for multi-family dwellings in Ontario and British Columbia as well as institutional buildings in Manitoba. Economists had expected a drop of around 10 per cent.
Meanwhile, commodities were mixed amid weak Chinese trade data.
There were concerns about domestic demand in the wake of the latest trade data from the world’s second-biggest economy. Chinese exports rose 9.4 per cent in August from a year earlier, but imports dropped 2.4 per cent.
Some economists say additional stimulus is needed to prevent China’s growth rate from waning after mini-stimulus measures helped it tick up to 7.5 per cent in the second quarter.
The soft Chinese data helped push October crude on the New York Mercantile Exchange down $1.04 to US$92.25 a barrel.
December bullion moved $12.80 lower to US$1,254.50 an ounce, while December copper gained three cents to US$3.20 a pound.
It is a relatively light week for economic data.
The major event of the week is August retail numbers in the U.S. Economists looked for a gain of 0.5 per cent, or 0.2 per cent ex-autos.
In Canada, markets will look to the latest Canadian housing starts data for August. The consensus called for an annualized gain of 195,000 units, down slightly from 198,000 in July.