Loonie down amid China concerns, traders await Bank of Canada announcement

TORONTO – The Canadian dollar was lower Wednesday amdi concerns about China’s property market reduced appetite for smaller currencies and the Bank of Canada prepared for a mid-morning rate announcement.

The loonie fell 0.31 of a cent to 96.88 cents US.

The greenback rose amid most other currencies amid speculation that the People’s Bank of China may tighten monetary policy to cool a hot property market.

China reported Tuesday that house prices surged in some cities including Guangzhou/Shenzhen where prices jumped 20 per cent year over year, Shanghai jumped 17 per cent year over year while Beijing was up 16 per cent year over year.

The PBoC reported Wednesday that outstanding real estate loans are up 19 per cent from a year ago.

There was also a report that the amount of bad loans written off by China’s largest banks swelled in the first half of the year.

The December crude contract on the New York Mercantile Exchange dropped $1.55 to US$96.75 a barrel, its lowest level since late June as ample supplies and a slowdown in U.S. hiring suggest subdued demand.

The U.S. Energy Department will release crude stockpile figures for last week later Wednesday and a 3 million barrel increase is expected.

December copper lost five cents to US$3.29 a pound. Gold prices also headed downward with the December bullion contract down $9.80 to US$1,332.80 an ounce.