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Loonie weakens along with stocks but posts monthly gain of 1%

Published 2020-04-30, 04:53 p/m
© Reuters.
USD/CAD
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CL
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* Canadian dollar falls 0.3% against the greenback

* Loonie notches a six-week high at 1.3850

* Price of U.S. oil increases 25%

* Canada's GDP was flat in February

By Fergal Smith

TORONTO, April 30 (Reuters) - The Canadian dollar weakened against the greenback on Thursday as Wall Street lost ground and domestic data showed no economic growth in the month before coronavirus-related lockdowns began, but the currency still posted its first monthly gain this year.

At 4:27 p.m. (2027 GMT), the Canadian dollar CAD=D4 was trading 0.3% lower at 1.3920 to the greenback, or 71.84 U.S. cents. The currency notched its strongest intraday level since March 16 at 1.3850, while it ended April up 1%, its first monthly advance since December.

Technical resistance near 1.3800 and a loss of positive momentum for risk appetite weighed on the loonie, said Amo Sahota, director at Klarity FX in San Francisco.

"There is a slight exhaustion in optimism in the market place, particularly as U.S. stocks drop," Sahota said.

U.S. stocks fell as grim economic data and mixed earnings prompted investors to take some profits at the close of Wall Street's best month in decades. runs a current account deficit and is a major exporter of commodities, including oil, so the domestic economy tends to be dependent on the global flow of trade and capital.

The Canadian economy stalled in February, Statistics Canada said, as parliament's budget watchdog warned that a dramatic contraction was possible this year, with a spike in deficit and debt levels. crude oil futures CLc1 settled 25% higher at $18.84 a barrel after several producers said they would cut output and as signs the U.S. crude glut was not growing as quickly as many had feared brought an upbeat close to one of the most volatile months for oil trading in history. coronavirus curve is flat but some worrying trends are emerging, particularly outbreaks in vulnerable indigenous communities, the country's top medical officer said. government bond yields eased across a flatter curve. The 10-year yield CA10YT=RR was down 2.7 basis points at 0.539%.

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