The Canadian dollar weakened to its lowest level in eight months against the greenback on Friday and was on track for its biggest weakly decline since March 2020 as the prospect of a slowing global economic recovery weighed on investor sentiment.
Global shares fell for a fifth straight day and the U.S. dollar remained firm in a flight to safety as rising coronavirus cases compounded concerns over Chinese growth and the outlook for U.S. stimulus.
Canada is a major exporter of commodities, including oil, so the loonie tends to be sensitive to the global economic outlook.
U.S. crude oil futures fell for a seventh day, down 1.9% at $62.50 a barrel, while the Canadian dollar weakened 0.6% to 1.2902 per greenback, or 77.51 U.S. cents.
The currency touched its weakest intraday level since last December at 1.2948. For the week, it was on track to fall 3%.
Domestic data showed that retail sales jumped by 4.2% in June from May but a preliminary estimate for July was less promising, with sales falling 1.7%.
“Unfortunately, with (coronavirus) case counts rising in recent weeks, the outlook for retail is getting cloudier,” Benjamin Reitzes, Canadian rates and macro strategist at BMO Capital Markets, said in a note.
Meanwhile, the United States extended the closure of its land borders with Canada and Mexico to non-essential travel such as tourism through Sept. 21 despite Ottawa’s decision to open its border to vaccinated Americans.
Canada‘s house prices will come off the boil next year, rising only modestly after a mini-boom in the middle of the pandemic, according to a Reuters poll of property market analysts who still expect affordability to worsen in the coming years.
Canadian government bond yields edged lower across the curve, with the 10-year down about half a basis point at 1.122%.
(Reporting by Fergal Smith; Editing by Anil D’Silva)
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WASHINGTON (AP) — Restaurant and hotel owners struggling to fill jobs. Supply-chain delays forcing up prices for small businesses. Unemployed Americans unable to find work even with job openings at a record high.
Those and other disruptions to the U.S. economy — consequences of the viral pandemic that erupted 18 months ago — appear likely to endure, a group of business owners and nonprofit executives told Federal Reserve Chair Jerome Powell on Friday.
The business challenges, described during a “Fed Listens” virtual roundtable, underscore the ways that the COVID-19 outbreak and its delta variant are continuing to transform the U.S. economy. Some participants in the event said their business plans were still evolving. Others complained of sluggish sales and fluctuating fortunes after the pandemic eased this summer and then intensified in the past two months.
“We are really living in unique times,” Powell said at the end of the discussion. “I’ve never seen these kinds of supply-chain issues, never seen an economy that combines drastic labor shortages with lots of unemployed people. … So, it’s a very fast changing economy. It’s going to be quite different from the one (before).”
The Fed chair asked Cheetie Kumar, a restaurant owner in Raleigh, North Carolina, why she has had such trouble finding workers. Powell’s question goes to the heart of the Fed’s mandate of maximizing employment, because many people who were working before the pandemic lost jobs and are no longer looking for one. When — or whether — these people resume their job hunts will help determine when the Fed can conclude that the economy has achieved maximum employment.
Kumar told Powell that many of her former employees have decided to permanently leave the restaurant industry.
“I think a lot of people wanted to make life changes, and we lost a lot of people to different industries,” she said. “I think half of our folks decided to go back to school.”
Kumar said her restaurant now pays a minimum of $18 an hour, and she added that higher wages are likely a long-term change for the restaurant industry.
“We cannot get by and pay people $13 an hour and expect them to stay with us for years and years,” Kumar said. “It’s just not going to happen.”
Loren Nalewanski, a vice president at Marriott Select Brands, said his company is losing housekeepers to other jobs that have recently raised pay. Even the recent cutoff of a $300-a-week federal unemployment supplement, he said, hasn’t led to an increase in job applicants.
“People have left the industry and unfortunately they’re finding other things to do,” Nalewanski said. “Other industries that didn’t pay as much perhaps … are (now) paying a lot more.”
Christopher Rugaber, The Associated Press
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