(Adds strategist quotes and details throughout, updates prices) * Canadian dollar weakens 0.4% against the greenback
(Adds strategist quotes and details throughout, updates prices)
*
Canadian dollar weakens 0.4% against the greenback
*
Touches its weakest since Nov. 10 at 1.3495
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Price of U.S. oil settles 0.4% lower
*
Canada’s yield curve inverts further
TORONTO, Nov 21 (Reuters) – The Canadian dollar weakened
to its lowest level in 11 days against its U.S. counterpart on
Monday as rising COVID-19 cases in China weighed on investor
sentiment and speculation that OPEC would increase output led to
volatility in the price of oil.
The loonie was trading 0.4% lower at 1.3440 to the
greenback, or 74.40 U.S. cents, after touching its weakest
intraday level since Nov. 10 at 1.3495.
“It’s predominantly being driven by exogenous factors,” said
Bipan Rai, North America head of FX strategy at CIBC Capital
Markets. “We see the (U.S.) dollar up across the board;
including against the Canadian dollar.”
The safe-haven U.S. dollar advanced against a basket
of major currencies, recouping some recent losses, as fresh
COVID-19 curbs in China fuelled worries over the global economic
outlook and made traders shun riskier currencies.
The price of oil, one of Canada’s major exports, whipsawed
as reports varied about whether Saudi Arabia and other OPEC oil
producers are considering a half-million barrel daily output
increase. U.S. crude oil futures settled 0.4% lower at
$79.73 a barrel.
Speculators have cut their bearish bets on the Canadian
dollar to the lowest since September, data from the U.S.
Commodity Futures Trading Commission showed on Friday.
Canadian retail sales data is due on Tuesday which could
offer clues on the strength of the domestic economy.
Canada’s yield curve, like the U.S. yield curve, has
inverted further this month, potentially sending a stronger
signal that the economy is headed for recession.
The 10-year eased 3.9 basis points on Monday to
3.086%, while it fell 2.3 basis points further below the 2-year
rate to a gap of roughly 87 basis points, the largest seen in
Refinitiv data going back to 1994.
(Reporting by Fergal Smith; Editing by Andrea Ricci and Deepa
Babington)
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