C$ retreats from 1-week high as oil producers ease output curbs

TORONTO: The Canadian dollar weakened against its US counterpart on Thursday as oil prices fell and worse-than-expected Chinese consumption data weighed on investor sentiment, with the loonie pulling back from an earlier one-week high.

The price of oil, one of Canada's major exports, declined after OPEC and other producers including Russia agreed to ease record supply curbs from August. US crude oil futures were down 1.1% at $40.74 a barrel.

Shares fell globally as US-China relations deteriorated and after data showed that Chinese retail sales surprisingly fell for the fifth straight month.

The Canadian dollar was trading 0.2% lower at 1.3536 to the greenback, or 73.88 US cents. The currency touched its strongest intraday level since last Thursday at 1.3498.

On Wednesday, the Bank of Canada said that Canada's economic activity will not return to pre-pandemic levels until 2022 and interest rates will remain low for at least two years as it again held its key overnight rate steady.

Canada added more than 1 million jobs in June after shedding nearly 3 million jobs in May as businesses reopened after shutdowns related to COVID-19, according to a report from payroll services provider ADP on Thursday.

Foreign investors bought a net C$22.41 billion in Canadian securities in May, led by federal government short-term bonds, following a revised C$49.03 billion total purchase in April, Statistics Canada said.

Canadian government bond yields were lower across much of a flatter curve, with the 10-year down 3.1 basis points at 0.507%.