TORONTO: The commodity-linked Canadian dollar weakened to a one-week low against its US counterpart on Wednesday as oil fell and the International Monetary Fund (IMF) cut its global growth forecasts.
Oil prices declined as investors awaited a clearer signal from weekly US crude inventory data on whether a glut was easing in the world's largest oil-consuming nation. US crude prices were down 1.70 percent to $43.89 a barrel.
At 9:26 a.m. EDT (1326 GMT), the Canadian dollar was trading at C$1.3083 to the greenback, or 76.44 US cents, weaker than Tuesday's close of C$1.3028, or 76.76 US cents
The currency's strongest level of the session was C$1.3014, while it touched its weakest since July 12 at C$1.3096.
Uncertainty over Britain's looming exit from the European Union prompted the IMF to cut its global growth forecasts for the next two years. Its forecast for Canada was cut by 0.1 percentage point to 1.4 percent for 2016. However, the IMF now expects Canada's economy will grow 2.1 percent in 2017, 0.2 percentage point more than its last projection in April.
Brexit is expected to dominate a meeting of Group of 20 finance ministers in China this week, a Canadian official said on Monday.
Britain is Canada's third-largest export market. However, Canada has said its focus is on completing a long-negotiated free trade agreement with the European Union.
Canadian government bond prices were lower across the maturity curve, with the two-year price down 4 Canadian cents to yield 0.592 percent and the benchmark 10-year falling 28 Canadian cents to yield 1.107 percent.
On Tuesday, the 10-year yield reached a three-week high at 1.150 percent.
Canadian retail sales data for May and inflation data for June are due on Friday.
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