TORONTO: The Canadian dollar weakened against its U.S. counterpart and all the other G10 currencies on Tuesday, as oil prices fell and despite data showing that Canada’s trade surplus widened in October.
U.S. crude prices were down 0.7% at $76.36 a barrel as economic uncertainty offset the bullish impact of a price cap placed on Russian oil and the prospects of a demand boost in China. Oil is one of Canada’s major exports.
Canadian exports and imports both climbed in October, impacted by the loonie’s depreciation in the month, while the trade surplus widened to C$1.2 billion ($888.5 million) from C$607 million, data from Statistics Canada showed.
The Canadian dollar was trading 0.3% lower at 1.3628 to the greenback, or 73.38 U.S. cents, the biggest decline among G10 currencies. It touched its weakest since last Tuesday at 1.3641.
Stronger than expected U.S. services industry data on Monday has driven speculation that the Federal Reserve will stick longer with aggressive interest rate rises.
The Bank of Canada has also been tightening at a rapid pace. Money markets are betting on a 25-basis-point rate increase when the BoC meets to set policy on Wednesday, downshifting from 50 basis points in October.
A slim majority of economists in a Reuters poll expect the central bank to stick to moving by 50 basis points.
Canadian government bond yields fell across a flatter curve, tracking the move in U.S. Treasuries.
The 10-year touched its lowest level since Aug. 16 at 2.767% before recovering to 2.796%, down 2.4 basis points on the day.
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