C$ hits a 2-week low as investors fret about new coronavirus cases

TORONTO: The Canadian dollar weakened to a two-week low against its U.S. counterpart on Monday as investors worried about a potential second wave of the coronavirus pandemic and domestic data showed a deeper-than-expected plunge in April factory sales.

The loonie was trading 0.2pc lower at 1.3617 to the greenback, or 73.44 U.S. cents.

The currency, which fell 1.2pc last week, touched its weakest intraday level since June 1 at 1.3685.

U.S. stocks fell as a resurgence in new coronavirus cases in China and parts of the United States dampened hopes of a swift economic revival that drove the Nasdaq to record highs last week.

Worries about the pandemic also weighed on the price of oil, one of Canada's major exports. U.S. crude prices were down 2.9pc at $35.2 a barrel.

Canadian factory sales decreased by 28.5pc in April from March on a record decrease in motor vehicle assembly, as well as a decline in petroleum and coal products, Statistics Canada said.

Analysts had forecast a 20pc decrease in the value of shipments.

Separate data, from the Canadian Real Estate Association, showed that Canadian home sales rebounded by a record 56.9pc month-over-month in May, when lockdowns to help contain the coronavirus pandemic eased, after plunging in April.

Canadian government bond yields were lower across a flatter curve in sympathy with U.S. Treasuries, with the 10-year down 3.7 basis points at 0.497pc.

The 10-year yield touched its lowest intraday since May-15 at 0.468pc.