Canadian dollar slides as Chinese lockdowns weigh on sentiment

TORONTO: The Canadian dollar weakened against its US counterpart on Friday, giving back this week's gains, as rising COVID-19 cases in China crimped risk appetite, while domestic data showed home sales surging to a record in December.

Global shares and the price of oil, one of Canada's major exports, fell as China reported the highest number of daily COVID-19 cases in more than 10 months. US crude oil futures were down 1.6% at $52.69 a barrel.

Investors worry that lockdowns to curb rising infections could hamper global economic recovery, while uncertainty over how easily Democrats will be able to get their proposals through the US Senate limited the market impact of President-elect Joe Biden's proposed $1.9 trillion stimulus package.

The Canadian dollar was trading 0.7% lower at 1.2722 to the greenback, or 78.60 US cents, having pulled back from a near three-year high on Wednesday at 1.2621. For the week, the loonie was on track to weaken 0.3%.

Canadian home sales rose 7.2% in December from November, setting a new record amid a surge in demand in the Toronto and Vancouver areas, the Canadian Real Estate Association said.

The housing market has benefited from record-low interest rates set by the Bank of Canada. The central bank is due to make an interest rate decision next week.

Canadian government bond yields were lower across much of a flatter curve in sympathy with US Treasuries. The 10-year was down 3.6 basis points at 0.820%, having pulled back from its highest in nearly 10 months at 0.887% on Tuesday.