Canadian dollar declines to July low as U.S. sequestration looms

Commodities Decline

Standard and Poor’s GSCI Index of 24 raw commodities fell for a second day, dropping 0.6%. Western Texas Intermediate oil fell as much as 0.6% to $95.25 a barrel in New York after dropping 1.5% on Friday, the biggest decline on a closing basis since Feb. 4. Raw materials including oil account for about half of Canada’s export revenue.

Foreign investors in December reduced their holdings of Canadian securities for the first time in six months, government figures showed.

Net sales totaled C$1.92 billion ($1.89 billion) in the month, following November’s revised purchase of C$5.5 billion, Statistics Canada said today in Ottawa. For the year, foreign investors bought a net C$83.2 billion of Canadian securities, the lowest since 2008 and down from C$97.3 billion in 2011.

The Bank of Canada’s Carney, in a CTV News interview last week, said the housing market for the world’s 11th-largest economy may weaken further.

“We have seen adjustment in the housing market, we think there’s a bit more to come in the next few years,” Carney said. He also said the recent rise in house prices, including a doubling in the value of his own home over the past five years, isn’t “normal.”

Bloomberg News

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