TORONTO: The Canadian dollar weakened against its US counterpart on Monday, surrendering last week's gains as oil fell and risk appetite receded.
US crude oil futures settled 36 cents lower at $50.24 a barrel, pressured by a rebound in Libyan oil output.
Oil is one of Canada's major exports.
"Risk coming off today in equity markets" added to pressure on Canada's currency, said Mazen Issa, senior fx strategist at TD Securities.
Wall Street dipped as investor worries intensified about the Trump administration's struggles to deliver on its pro-business policies.
Commodity-linked currencies, such as the loonie, tend to underperform when investors turn less optimistic about the economic outlook.
The "price action" of the Canadian dollar against the US dollar has led to speculation that there have been mergers and acquisitions-related buying of greenbacks, said Brad Schruder director of corporate sales and structuring at BMO Capital Markets.
Each time the US dollar has dipped there has been an "interested buyer," Schruder added.
Last week, ConocoPhillips agreed to sell oil sands and western Canadian natural gas assets to Calgary-based Cenovus Energy Inc for C$17.7 billion.
The Canadian dollar ended at C$1.3386 to the greenback, or 74.70 US cents, weaker than Friday's close of C$1.3299, or 75.19 US cents.
The currency's strongest level of the session was C$1.3295, while it touched its weakest since March 29 at C$1.3400.
The loonie rose 0.6 percent last week as data showing robust domestic growth in January raised prospects of an earlier-than-expected Bank of Canada interest rate hike. The currency finished the first quarter with a 1 percent gain after rising more than 3 percent in 2016.
The central bank's next interest rate decision and Monetary Policy Report are due on April 12.
Canadian government bond prices were higher across a flatter yield curve in sympathy with US Treasuries as investors sought safety from falling stocks.
The two-year edged up 2 Canadian cents to yield 0.737 percent and the 10-year climbed 40 Canadian cents to yield 1.576 percent.
Canada's trade report for February is due on Tuesday, while the country's employment report for March is due on Friday.
Comments
Comments are closed for this article.