TORONTO - The Canadian dollar closed below parity for the first time since the end of January as the greenback advanced against other currencies amid data showing soft readings on European and Chinese manufacturing.
The loonie was down 0.38 of a cent to 99.96 cents US.
The eurozone composite purchasing managers index fell to 49.7 during February. The manufacturing PMI rose less than expected to 49, still in contraction territory. The services PMI fell a point to 49.4, against economists expectations for a small increase.
"With both figures below 50, hopes that the Euro area might be able to skirt a recession have likely been dashed," said BMO Capital Markets senior economist Benjamin Reitzes.
There was also another fairly weak Chinese manufacturing survey.
The preliminary reading of HSBC's China manufacturing index rose from 48.8 in January to 49.7 in February. But the number was still below the 50-level that signifies expansion, raising hopes that China could embark on more stimulus measures to encourage growth.
The greenback also gained favour on currency markets as Fitch ratings agency downgraded Greece further into junk status, from CCC to C following the announcement of the details of the country's debt swap deal with private creditors.
The agency said Wednesday the downgrade indicated "that default is highly likely in the near term." The bond swap deal with private creditors will see €107 billion of Greece's debt held by banks and other private holders of government bonds written off.
The loonie was off its lowest levels of the session as oil and copper prices improved somewhat.
The April crude contract on the New York Mercantile Exchange added three cents to US$106.28 a barrel. April copper was unchanged at US$3.83 a pound after surging 13 cents on Tuesday. And bullion ran ahead $13 to US$1,771.30 an ounce.