Investing.com - The Canadian dollar was lower against the U.S. dollar on Monday, tracking declines in oil prices which fell to more than six-year lows amid ongoing concerns about the global supply glut and the demand outlook.
USD/CAD hit highs of 1.3153, not far from the 11-year peaks of 1.3212 set on August 5 and was last at 1.3119.
US oil futures fell to the lowest level in six-and-a-half years on Monday after data showing that Japan’s economy contracted in the second quarter fueled fears that slowing growth in Asian economies will weigh on the demand outlook for oil.
Oil prices were also hit after a report showing an uptick in the rig count last week supported expectations that U.S. producers will ramp up activity in the coming months, adding to fears over a global supply glut.
Earlier this year the Bank of Canada cut interest rates in response to a rout in oil prices, citing the impact on the inflation outlook.
The loonie found some support after Statistics Canada reported that foreign investment in Canadian securities rebounded in June.
Non-residents bought C$8.51 billion in Canadian assets, more than offsetting May's decline. Overall investment in the Canadian money market reached a record C$12.04 billion the report said.
The greenback shrugged off a report showing that manufacturing activity in the New York region slumped to its lowest level since November 2009 this month.
The Federal Reserve Bank of New York said that its general business conditions index dropped to -14.9 this month from 3.86 in July as new orders and shipments fell sharply.
The greenback remained supported as investors looked ahead to Wednesday’s minutes of the Federal Reserve’s July meeting, which it was hoped would provide more clarity on its plans to hike short-term interest rates for the first time since 2006.
Overall market sentiment remained supported as concerns over a prolonged depreciation of the yuan eased.
The US dollar index, which tracks the greenback against a basket of six major rivals, was last at 96.69.