The TMX logo is displayed in Toronto on Wednesday, September 11, 2024. (Photo by Paige Taylor White/The Canadian Press)



Toronto – The Canadian dollar slipped below 70 cents US during late-morning trading on Tuesday, following the latest inflation data from Statistics Canada. The loonie traded at 69.84 cents US, a notable drop from Monday’s 70.23 cents US. This came after November’s inflation rate dipped to 1.9%, down slightly from 2.0% in October, signalling a continued slowdown in price growth.
The decline in the loonie coincided with losses in Canada’s main stock market. The S&P/TSX composite index fell by 72.91 points, landing at 25,074.30. Lower inflation can often suggest a cooling economy, and investors appeared to react cautiously to the news, pulling back on equities.

Across the border, U.S. markets faced similar setbacks. The Dow Jones Industrial Average fell sharply, dropping 270.41 points to 43,447.07. The S&P 500 index lost 22.08 points to close at 6,052, while the tech-heavy Nasdaq composite declined by 70.95 points, ending the session at 20,102.94.

Commodities were also caught in the market downturn, with crude oil and natural gas prices taking significant hits. February’s crude oil contract fell $1.25, trading at $69.04 per barrel. Meanwhile, the January natural gas contract dipped eight cents to settle at $3.14 per mmBTU.

Precious metals and industrial materials also faced declines. February gold contracts dropped $16, bringing gold to $2,654 an ounce, while March copper contracts fell five cents, trading at $4.14 per pound. These commodity price drops further illustrate the ripple effects of a slowing economy and hesitant investor sentiment.

What’s Driving the Decline?

The lower inflation rate, while often seen as positive for consumers, has sparked concerns among investors. A dip below the Bank of Canada’s 2% inflation target may indicate an economic slowdown, leading to weaker consumer spending and reduced business activity. The loonie’s fall reflects these concerns, as a weaker currency often accompanies periods of economic uncertainty.

Additionally, declining oil prices are a key factor impacting Canada’s resource-driven economy. As one of the world’s largest oil exporters, the country’s economic health is closely tied to energy markets. Falling crude prices can hurt corporate revenues and government budgets, adding to broader economic worries.

Global Impacts and Investor Sentiment

The losses in Canadian and U.S. markets suggest investors are adjusting their portfolios in response to mixed economic signals. While slowing inflation could ease the pressure on central banks to raise interest rates further, it may also point to weakening growth. For Canada, a softer loonie and declining commodity prices complicate the economic outlook, creating a challenging environment for businesses and consumers alike.

Tuesday’s market activity serves as a reminder of the interconnectedness of inflation, currency strength, and investor confidence. As 2024 nears its close, analysts will closely watch for signs of stability or further volatility in the months ahead.

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.

You may also like

Wall Street Eyes Market Dips, But When Will It Be Safe to Buy?

The U.S. stock market is wrapping up one of its roughest quarters since the 1980s, trailing global markets by the....

Energy Stocks Boost S&P/TSX, U.S. Markets Mixed Ahead of Tariffs

Canada’s main stock index climbed on Monday, driven by gains in energy and industrial shares as oil prices surged. Meanwhile,....

Canada’s Economy Faces Slowdown as Tariff Pressures Rise

The Canadian economy started 2025 with momentum but is now losing steam due to harsh winter conditions and the looming....

Markets Slide 400 Points as Tariff, Inflation Fears Grow

Canadian and U.S. stock markets took a sharp dive on Friday as investors reacted to concerns about inflation and looming....

Stock Markets React as U.S. Auto Tariff Plans Shake Industry

Canada’s stock market remained unchanged on Thursday, while U.S. markets saw a dip following President Donald Trump’s announcement of new....

GameStop’s Bold Bitcoin Move Sparks Market Concerns

GameStop’s stock took a nosedive on Thursday after the company announced a controversial plan to sell debt and use the....

ICBC Announces $110 Rebates for Eligible Drivers

Many ICBC customers will soon receive $110 rebates, as the auto insurer distributes a new round of refunds. The rebates,....

Wall Street Holds Steady as Trump Media Soars Despite Market Uncertainty

Wall Street showed resilience on Tuesday, following a strong surge the previous day fueled by optimism that President Donald Trump’s....

S&P/TSX Gains as Metal Stocks Rise; U.S. Markets Also Up

Canada’s stock market saw a steady rise in late-morning trading, driven by gains in base metal stocks. The S&P/TSX composite....

Trump’s Tariff Shift Shakes U.S. Treasury Market

U.S. Treasury bonds took a hit as investors shifted toward riskier assets following reports that President Donald Trump’s upcoming tariffs....

Trump’s Trade War Reshapes Canada’s 2025 Election Debate

The rising cost of living has been a major issue for Canadians, and with the federal election on the horizon,....

Stock Markets Gain as Investors Eye Targeted US Tariffs

Stock futures in the US and Europe climbed on hopes that the next wave of tariffs from President Donald Trump’s....