Canadian dollar falls by most in 7 months on pandemic lockdown fears

TORONTO: The Canadian dollar slumped to near a two-week low against its broadly stronger US counterpart on Monday, as investors worried about stricter lockdowns globally to help contain rising coronavirus infections.

The Canadian dollar was trading 1.1% lower at 1.2820 to the greenback, or 78.00 US cents, its biggest decline since June 11. The currency touched its weakest intraday level since Dec. 29 at 1.2835.

Global equities slipped from record highs as worldwide coronavirus cases surpassed 90 million, while the price of oil, one of Canada's major exports, fell more than 1%.

On Friday, economists and industry groups warned that protracted COVID-19 restrictions across much of Canada are darkening the outlook into the first quarter, after data showed the country lost more jobs than expected in December.

Ontario, Canada's most populous province, is considering "more extreme measures" on top of the widespread lockdowns in place to combat record-breaking COVID-19 cases, its premier said on Friday.

Speculators have cut their bullish bets on the Canadian dollar, data from the US Commodity Futures Trading Commission showed on Friday. As of Jan. 5, net long positions had fallen to 14,524 contracts from 15,368 in the prior week.

The U.S. dollar gained against a basket of major currencies on Monday as widening U.S. Treasury yields and expectations of more fiscal stimulus lifted it for a third consecutive day.

Canadian government bond yields were mixed across the curve, with the 10-year down about half a basis point at 0.809%. Earlier, it touched its highest yield since April 9 at 0.822%.