📈 69% of S&P 500 stocks beating the index - a historic record! Pick the best ones with AI.See top stocks

Canadian dollar hits 9-day low as investors cool on Canada's prospects

Published 2019-03-21, 03:46 p/m
© Reuters.  Canadian dollar hits 9-day low as investors cool on Canada's prospects
USD/CAD
-
CL
-
CA10YT=RR
-
DXY
-

* Canadian dollar falls 0.6 percent against the greenback

* Price of U.S. oil declines 0.4 percent

* Canadian wholesale trade rises 0.6 percent in January

* Canada's 10-year yield hits 21-month low at 1.635 percent

By Fergal Smith

TORONTO, March 21 (Reuters) - The Canadian dollar declined to a nine-day low against its broadly stronger U.S. counterpart on Thursday, as oil prices fell and investors worried that slower U.S. growth could hurt Canada's export-dependent economy.

At 3:24 p.m. EDT (1924 GMT), the Canadian dollar CAD= was trading 0.6 percent lower at 1.3380 to the greenback, or 74.74 U.S. cents. The currency touched its weakest since March 12 at 1.3401.

"The Canadian dollar, which has been a darling of the market for a while, is finally seeing some significant headwinds come its way," said Amo Sahota, director at Klarity FX in San Francisco. "If the U.S. is concerned (about the outlook), then Canada needs to be more concerned as the little neighbor."

On Wednesday, Federal Reserve policymakers downgraded their U.S. growth, unemployment and inflation forecasts. sends about 75 percent of its exports, including oil, to the United States.

U.S. crude oil futures CLc1 settled 0.4 percent lower on Thursday at $59.98 a barrel, while the U.S. dollar .DXY rallied against a basket of major currencies.

A report by Fitch Ratings saying that Canadian fiscal deficits will make the economy more vulnerable in a downturn, added to pressure on the Canadian dollar, Sahota said.

Canada's combined federal and provincial government debt "remains close to a level that is incompatible with 'AAA' status," Fitch Ratings said.

On Tuesday, Canada presented a federal budget that forecast a bigger fiscal deficit of C$19.8 billion in 2019-20 and projected a nearly 20 percent jump in bond issuance. about the outlook overshadowed domestic data on Thursday showing increased hiring in February and a stronger-than-expected rise in January wholesale trade. inflation report for February and January retail sales data are due on Friday.

Canadian government bond prices edged lower across much of the yield curve, with the 10-year CA10YT=RR falling 6 Canadian cents to yield 1.673 percent. Still, the 10-year yield touched its lowest intraday since June 2017 at 1.635 percent.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.