TORONTO (Reuters) - The Canadian dollar weakened to a seven-week low against its U.S. counterpart on Thursday as investors worried about another global economic hit from the coronavirus pandemic and Ottawa's pledge of further economic aid failed to lift the currency.
The loonie
Global shares (DXY) slid and the U.S. dollar (=USD) rose, with political stalemate in Washington adding to investor anxiety.
Canada runs a current account deficit and is a major exporter of oil, so the loonie tends to be sensitive to the global flow of trade and capital.
U.S. crude oil futures (CLc1) were down 0.20% at $39.85 a barrel as a fall in U.S. inventories last week was offset by the stronger greenback and a renewed wave of COVID-19 cases in Europe.
Canada is also seeing a pick-up in COVID-19 infections. The Canadian government's vow to double down on pandemic-related spending will support activity but raises questions over a burgeoning deficit, economists say.
Canadian government bond yields were little changed across the curve, with the 10-year (CA10YT=RR) trading at about 0.560%.