*Canadian dollar weakens 0.4% against the greenback*Touches its weakest since Jan. 4 at 1.3665*Flash estimate shows wholesale trade up 3% in January*C
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Canadian dollar weakens 0.4% against the greenback
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Touches its weakest since Jan. 4 at 1.3665
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Flash estimate shows wholesale trade up 3% in January
*
Canadian bond yields rise across curve
TORONTO, Feb 24 (Reuters) – The Canadian dollar weakenedto a seven-week low against its U.S. counterpart on Friday asworries about the Federal Reserve’s interest rate outlook offsetadditional evidence the domestic economy remained robust at thestart of the year.
The loonie was trading 0.4% lower at 1.36 to thegreenback, or 73.53 U.S. cents, after touching its weakest levelsince Jan. 4 at 1.3665. It was down 1% for the week, its secondstraight weekly decline.
“I think it is pretty well all (U.S.) dollar driven fortoday’s USD-CAD price action,” said Jay Zhao-Murray, a marketanalyst at Monex Canada Inc. “This shifting narrative towardhigher interest rates has been driving this risk-off dollarbullish scenario, and if you throw in the classic month-endflows effect from corporates and real money (investors), that’sdriving a dollar bid, too.”
Wall Street fell and the U.S. dollar rallied againsta basket of major currencies as U.S. consumer spending reboundedsharply in January, while inflation accelerated, fueling fearsthat the Fed could continue raising interest rates through thesummer.
It was not all bad news for the loonie. The price of oil,one of Canada’s major exports, settled 1.2% higher at $76.32 abarrel on the prospect of reduced Russian supply.
In addition, preliminary data showed that wholesale traderose 3.0% in January from December. It follows a preliminaryestimate on Tuesday that showed retail sales gaining 0.7% lastmonth, while previous data for January showed the economy added10 times more jobs than expected and manufacturing activitypicked up.
Canadian government bond yields were higher across thecurve, tracking the move in U.S. Treasury yields.
The 10-year climbed 6.3 basis points to 3.397%,moving back in reach of the three-month high it posted onTuesday at 3.447%.(Reporting by Fergal Smith; Editing by Will Dunham)
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