Canadian dollar slides to 2-week low as oil prices tumble
- Canadian dollar falls 0.5% against the greenback.
- Loonie touches its weakest since Aug. 26 at 1.3177.
- Price of US oil decreases 6.5%.
- Canadian bond yields ease across much of a flatter curve.
TORONTO: The Canadian dollar fell to a near two-week low against its broadly stronger US counterpart on Tuesday, as oil prices tumbled and a selloff in technology shares weighed on investor sentiment.
World shares struggled as doubts about a recovery in tech stocks lingered after last week's rout.
Canada runs a current account deficit and is a major exporter of commodities, including oil, so the loonie tends to be sensitive to the global flow of trade and capital.
US crude prices were down 6.5% at $37.19 a barrel, pressured by concerns that a recovery in demand could weaken as coronavirus infections flare up around the world.
The Canadian dollar was trading 0.5% lower at 1.3162 to the greenback, or 75.98 US cents. The currency touched its weakest intraday level since Aug. 26 at 1.3177.
The Bank of Canada will leave its policy interest rate at 0.25% on Wednesday and likely follow the US Federal Reserve's path of reviewing its current inflation-targeting framework to protect the economy from the fallout of the coronavirus, a Reuters poll showed.
On Friday, data showed that Canada added 245,800 jobs in August, the fourth consecutive monthly increase.
Canadian government bond yields were lower across much of a flatter curve in sympathy with US Treasuries on Tuesday. The 10-year fell 3.5 basis points to 0.562%.
Comments
Comments are closed.