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Thursday, May 5, 2011

News Canadian lower, crude oil prices slide amid poor U.S. economic data

News Canadian lower, crude oil prices slide amid poor U.S. economic data : The Canadian dollar was down sharply Thursday as oil prices continued to slide amid worries the U.S. economy. The currency lost 0.81 of a cent to 103.52 cents US, adding up to a drop of more than two cents this week as prices have also fallen sharply for gold, silver and copper.

The June crude contract on the New York Mercantile Exchange dropped $2.61 to US$106.63 a barrel down from a 2½-year high above US$114 late last week.

Worries about the American economy grew after the Institute for Supply Management reported Wednesday its service sector index rose at the slowest pace in eight months in April.

There was also negative news two days before the release of the U.S. non-farm payrolls report for April. Private payroll processor ADP reported that 179,000 new private sector jobs were added in April, far fewer than economists expected.

And on Thursday, the U.S. Labour Department reported that claims for unemployment insurance surged to 474,000 last week from 431,000.

Traders are also looking ahead to the release of Canadian employment data for April on Friday. Economists expect that about 20,000 jobs were created last month.

Metal prices also retreated with the June gold contract on the Nymex down $11.70 to US$1,503.60 while the July copper contract in New York fell 12 cents to US$4.02.

Silver prices also continued to retreat with the July silver contract in New York down $1.41 to US$37.96 an ounce.

The drop came after the main U.S. metals exchange announced further hikes to margin requirements. The latest hike amounts to an 84 per cent increase in margin requirements in two weeks by CME Group Ltd., spread over four separate changes.

Silver prices are down over 20 per cent this week and analysts say volatility in the sector has spread to other areas since investors have been forced to sell other securities to meet higher margin calls.

Meanwhile, the European Central Bank left its key interest rate unchanged at 1.25 per cent after raising rates a quarter-point last month from the record low of one per cent and has made it clear that more increases are coming to contain inflation.

The Bank of England announced it was keeping its key interest rate at a record low of 0.5 per cent amid sluggish economic growth and a surprise drop in the inflation rate. For the latest updates PRESS CTR + D or visit Stock Market news Today

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