(The Canadian Press) TORONTO – The Canadian dollar was lower Thursday as traders continued to fixate on the U.S. budget impasse that has resulted in a partial shutdown of the U.S. government.
Moreover, traders worry about an Oct. 17 deadline when the U.S. hits its debt limit and starts to run out of cash to pay its bills, an event that could trigger severe economic disruption around the world.
The loonie slipped 0.05 of a cent to 96.74 cents US.
Hopes had been high earlier in the week that Republicans and Democrats would come to a last-minute agreement prior to Monday midnight that would avoid the shutdown, and then that the withdrawal of some services would be short-lived.
But now the worry is that the shutdown will carry on for another couple of weeks to the debt-ceiling deadline.
At issue is the Affordable Health Care Act, or Obamacare.
Republican House Speaker John Boehner has made clear that curbing the health care overhaul that President Barack Obama pushed into law three years ago remains part of the price for ending the shutdown. Traders are concerned that price tag will also apply to raising the debt ceiling.
November crude on the New York Mercantile Exchange was off 37 cents to US$103.73 a barrel.
On the economic front, jobless insurance claims in the U.S. were up a slight 1,000 last week to 308,000.
The release of the U.S. government's September employment report had been scheduled for Friday. But the government shutdown has resulted in that release being postponed.
Later in the morning, investors will look to the Institute for Supply Management's non-manufacturing index for a snapshot of the health of the services sector. The index is expected to slip to 57.5 in September from 58.6 in August.
There was some positive economic news from the world's second-biggest economy.
China's official non-manufacturing Purchasing Managers' Index rose to a six-month high of 55.4 in September from 53.9 in August.
The non-manufacturing PMI covers services including retail, aviation and software as well as real estate and construction.