TORONTO: The Canadian dollar softened against the greenback on Wednesday as crude prices fell, but losses were tempered after minutes from the latest Federal Reserve meeting showed policymakers were worried about hiking interest rates too soon.
Crude prices have jumped 35 percent from multi-year lows over the past month, after a slump that has hurt the currency of Canada, a major producer. With oil retreating Wednesday, the domestic currency struggled.
"If you're trading the loonie, you can not get away from the violent ebb and flow of the oil trade," said Adam Button, currency analyst at ForexLive in Montreal, referring to the currency by a colloquial term for the water bird featured on its dollar coin.
The slump in oil offset the Fed news, which weighed on the greenback across the board.
"The Canadian dollar has benefited less than it would have if not for a nearly $2 fall in oil prices," Button said.
The Canadian dollar ended the day at C$1.2418 to the greenback, or 80.53 US cents, weaker than Tuesday's close of C$1.2374, or 80.81 US cents.
Markets also digested a flurry of data, mostly out of the US, including figures that showed plunging crude prices were keeping a lid on inflation, which could argue against an interest rate hike by the Fed.
US housing starts fell in January as ground breaking for single-family projects slipped off a 6-1/2 year high.
In Canada, wholesale trade jumped a more-than-expected 2.5 percent to C$55.4 billion in December on widespread gains across the sectors.
Canadian government bond prices were higher across the maturity curve, with the two-year up 5 Canadian cents to yield 0.431 percent and the benchmark 10-year gaining 29 Canadian cents to yield 1.476 percent.
Comments
Comments are closed for this article.