Canadian dollar hits 6-week low as Wall Street tumbles

TORONTO: The Canadian dollar fell to a near six-week low against its broadly stronger US counterpart on Monday, as oil prices declined more than 4% and rising coronavirus infections weighed on investor sentiment.

The loonie was trading 0.8% lower at 1.3310 to the greenback, or 75.13 US cents. The currency touched its weakest intraday level since Aug. 12 at 1.3320.

"The USD has caught a risk-off, safe-haven bid due to the turbulence in the equity markets," said Tony Valente, a senior FX dealer at AscendantFX. "It seems that equity markets haven't finished their September correction yet."

Wall Street's main indexes slid to seven-week lows as renewed lockdown measures in some countries due to the spread of the virus cast doubt over economic recovery.

The sell-off in oil, one of Canada's major exports, intensified pressure on the loonie, Valente said.

US crude oil futures settled 4.4% lower at $39.31 a barrel as rising coronavirus cases stoked worries about global demand, while a potential return of Libyan production bolstered oversupply fears.

Canada has also seen a rise in coronavirus infections. On Saturday, Ontario, the country's most-populous province, cracked down on private social gatherings.

Canadian new house prices rose 2.1% year-over-year in August, which was the largest increase since March 2018, Statistics Canada said on Monday.

Canadian government bond yields were lower across a flatter curve in sympathy with US Treasuries. The 10-year fell 2.9 basis points to 0.552%.

Canadian Prime Minister Justin Trudeau is scheduled to unveil on Wednesday what he says is a far-reaching plan to help Canada recover from the coronavirus pandemic.