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Loonie extends weekly decline as trade uncertainty weighs on sentiment

ForexMay 15, 2020 15:36
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* Canadian dollar weakens 0.4% against the greenback

* For the week, the loonie was down 1.4%

* Canadian home sales plunge 56.8% in April

* Canadian bond yields rise across the curve

By Fergal Smith

TORONTO, May 15 (Reuters) - The Canadian dollar added to this week's decline against its U.S. counterpart on Friday as worries rose that trade tensions between the United States and China could ramp up and domestic data showed a record plunge in home sales.

U.S. stocks fluctuated as the Trump administration moved to block shipments of semiconductors to China's Huawei Technologies from global chipmakers. A renewed Sino-U.S. trade war could worsen the economic downturn caused by the coronavirus outbreak. on Wall Street in recent days have been a headwind for the Canadian dollar, said Erik Nelson, a currency strategist at Wells Fargo (NYSE:WFC) in New York.

"We're in a market now where liquidity is so thin" that trading flows can move a currency more than would be expected, Nelson said.

Canadian home sales tumbled by 56.8% in April from the previous month as lockdowns to help contain the coronavirus pandemic pushed buyers and sellers to the sidelines, the Canadian Real Estate Association (CREA) said. Canadian dollar CAD=D4 was trading 0.4% lower at 1.4102 to the greenback, or 70.91 U.S. cents. The currency, which was down 1.4% for the week, traded in a range of 1.4019 to 1.4117.

Ottawa has been rolling out fiscal measures to help cushion the economic impact of the coronavirus crisis on Canadians. On Friday, Prime Minister Justin Trudeau said that an emergency wage subsidy program would be extended by three months to the end of August to help firms retain employees. investors divested a record-breaking C$42.2 billion in foreign securities in March amid heightened market volatility caused by the coronavirus pandemic, Statistics Canada data showed. crude oil futures CLc1 settled 6.89% higher at $29.43 a barrel on signs that demand was picking up, with China reporting increased refinery runs and rounding out a week of bullish news on the supply front. Oil is one of Canada's major exports. government bond yields rose across the curve, with the 10-year CA10YT=RR up 1.5 basis points at 0.542%.

Canadian financial markets will be closed on Monday for the Victoria Day holiday.

Loonie extends weekly decline as trade uncertainty weighs on sentiment
 

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