TORONTO: The Canadian dollar tumbled on Monday to its weakest level against the US currency in three weeks, as commodity prices plunged on weaker-than-expected Chinese data.
Gold, silver, copper and oil prices were all slammed after data showed China's recovery unexpectedly stumbled in the first three months of 2013, with an annual growth rate of 7.7 percent versus economists' expectations of 8 percent growth.
"Canada has been part of the sell-off. There's been a bit of flight into US dollars," said Don Mikolich, executive director, foreign exchange sales at CIBC world markets. "Anytime commodities are getting hit, that's never good for Canada."
Gold prices in particular, sank more than 8 percent to below $1,400 per ounce, posting the worst two-day loss in 30 years.
"Obviously the key theme was the soft Chinese data and the impact it had on commodities and commodity currencies," said Matt Perrier, a director of foreign exchange sales at BMO Capital Markets.
The Canadian dollar finished the North American session at C$1.0254 against the US dollar, or 97.52 US cents on Monday, more than a cent off Friday's finish at C$1.0138, or 98.64 US cents. This was the currency's weakest performance since March 22.
"A lot of our accounts are seeing the move up to C$1.02 as an opportunity," said Mikolich. "The buyers are obviously on hold now until we can move back to the mid-1.01's."
Market-moving data from both sides of the border, including US and Canadian consumer price index data, will be in focus this week. The Bank of Canada's next interest-rate decision and monetary policy report will come on Wednesday.
The price of Canadian government debt was higher across the curve, with the two-year bond climbing 3.2 Canadian cents to yield 0.937 percent and the benchmark 10-year bond rising 17 Canadian cents to yield 1.718 percent.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>
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