C$ slides to 1-week low, tracking downward shift in risk appetite

TORONTO: The Canadian dollar fell to a one-week low against the greenback on Thursday, as investor worries about the outlook for the global economy overshadowed domestic data showing a buoyant housing market.

The loonie was trading 0.6% lower at 1.3220 to the greenback, or 75.64 US cents. The currency touched its weakest intraday level since last Thursday at 1.3259.

"CAD is trading as a risk proxy within the G10 world," said Christian Lawrence, a senior market strategist at Rabobank.

Canada runs a current account deficit and is a major producer of commodities, including oil, so the Canadian dollar tends to be sensitive to the global flow of trade and capital.

The two-week rolling correlation between the loonie and the S&P 500 has climbed since the start of the month to move above 0.9, Refinitiv Eikon data showed, indicating the currency and the stock market are moving largely in the same direction.

US stocks fell, although clawing back some of their earlier decline, as an unexpected rise in weekly jobless claims compounded fears of a stalling economic recovery.

US crude oil futures settled 0.2% lower at $40.96 a barrel as new restrictions to stem a surge in COVID-19 infections dimmed prospects for fuel demand.

In domestic data, home sales climbed 0.9% in September from August, raising them to a monthly record for the third month in a row.

But the data had little impact on the currency. "Domestic releases aren't moving the needle" in the current environment, Lawrence said.

Canadian government bond yields were mixed across the curve, with the 10-year down less than one basis point at 0.572%.