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Canadian dollar lower amid strong housing data, markets look to jobs report

Loonies are pictured in Vancouver, Sept. 22, 2011. THE CANADIAN PRESS/Jonathan Hayward

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Loonies are pictured in Vancouver, Sept. 22, 2011. THE CANADIAN PRESS/Jonathan Hayward

TORONTO - The Canadian dollar closed slightly lower Thursday amid a strong increase in building permits.

The loonie closed down 0.06 of a cent to 91.57 cents US after charging ahead almost four-tenths of a cent Wednesday in the wake of a much better than expected trade surplus for June.

On Thursday, Statistics Canada said building permits worth $8 billion were issued during June, up 13.5 per cent from May. However, most of the increase was in the non-residential sector.

Traders looked ahead to Friday and the release of the July jobs report. Economists generally expect that 25,000 jobs were created during the month.

Overseas, the European Central Bank said that it is leaving benchmark interest rate unchanged at a record low of 0.15 per cent. The decision was widely expected, in part because the ECB has little room to cut with rates so close to zero.

At a later news conference, European Central Bank President Mario Draghi cautioned that the crisis in Ukraine could weigh on the fragile economic recovery in the eurozone. He said the fallout from Ukraine was “hard to assess” but that sanctions and countersanctions could increase the impact.

Ongoing tensions continued over the crisis in Ukraine amid fresh Russian sanctions on the West. The sanctions war heated up Thursday after Russia banned most food imports from the West in retaliation for sanctions over Ukraine.

Markets had initially shrugged off the standoff with Ukraine last month but tensions have been growing lately as traders worry about Russia getting more involved in the Ukraine government's fight against pro-Russian rebels.

Nervous investors pushed bullion up for a second day with the December contract in New York up $4.30 to US$1,312.50 an ounce.

Investors also sought safety in U.S. government bonds. The yield on the 10-year note, which falls as prices rise, fell to 2.43 per cent, its lowest of the year.

Eleswhere on the commodity markets, the September crude contract in New York was up 42 cents to US$97.34 a barrel.

September copper gained a cent to US$3.18.

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