Markets

Canadian dollar hits a 12-day low pandemic curbs weigh on oil

  • The price of oil, one of Canada's major exports, plunged as concerns over new pandemic curbs and slow vaccine rollouts in Europe added to oversupply uneasiness.
Published March 24, 2021

TORONTO: The Canadian dollar weakened to its lowest in nearly two weeks against the greenback on Tuesday as oil prices tumbled, while a senior Bank of Canada official said there were signs of more investment activity in Canada's housing market.

The price of oil, one of Canada's major exports, plunged as concerns over new pandemic curbs and slow vaccine rollouts in Europe added to oversupply uneasiness.

US crude oil futures settled 6.2% lower at $57.76 a barrel, while the Canadian dollar fell 0.5% to 1.2586 per US dollar, or 79.45 US cents. It touched its weakest since March 11 at 1.2594.

US stocks also tumbled as concerns about the cost of infrastructure spending and potential tax hikes to pay for President Joe Biden's $1.9 trillion relief bill weighed on investors.

The Bank of Canada has anecdotal evidence and limited data that shows investment activity and home flipping is rising in certain Canadian housing markets, a deputy governor told Reuters.

Canadian Finance Minister Chrystia Freeland said she would present the first federal budget in two years on April 19, promising it will offer the support needed to those struggling during the pandemic, plus a plan to boost growth.

Canadian government bond yields were lower across a flatter curve in tandem with US Treasuries.

The 10-year fell 6.7 basis points to 1.490%, extending its pullback from a 14-month high last Thursday at 1.677%.

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