(Adds analyst quotes and details throughout, updates prices) * Canadian dollar gains 0.5% against the greenback
(Adds analyst quotes and details throughout, updates prices)
*
Canadian dollar gains 0.5% against the greenback
*
Touches its strongest since Sept. 21 at 1.3388
*
Price of U.S. oil settles 3.1% lower
*
Canadian bond yields ease across flatter curve
TORONTO, Nov 8 (Reuters) – The Canadian dollar
strengthened to its highest level in nearly seven weeks against
its U.S. counterpart on Tuesday as the greenback broadly lost
ground and the confirmation of a key technical formation
improved the outlook for the currency.
The loonie was trading 0.5% higher at 1.3425 to the
greenback, or 74.49 U.S. cents, after touching its strongest
level since Sept. 21 at 1.3388.
“It broke out this morning on broad U.S. dollar selling. The
rise in the stock market triggered that,” said Erik Bregar,
director, FX & precious metals risk management at Silver Gold
Bull.
Wall Street climbed during voting in midterm elections that
will determine control of the U.S. Congress, with investors
betting on a political stalemate that could prevent major policy
changes.
The price action for USD-CAD in recent days has confirmed “a
bearish head and shoulders pattern,” Bregar said, adding “I
think we could see 1.32 or 1.33 over the next month or two.”
Confirmation of a head and shoulders formation can sometimes
signal the reversal of a market trend
Investors were awaiting U.S. inflation data on Thursday for
clues on the outlook for further outsized interest rate hikes by
the Federal Reserve.
The Bank of Canada has also been hiking aggressively. As the
central bank considers raising interest rates at a slower pace,
it is focusing on inflation measures that are more timely than
typically observed, which could help it avoid tightening beyond
the level needed to subdue price pressures.
The price of oil, one of Canada’s major exports, slipped as
worsening COVID-19 outbreaks in China heightened fears of lower
fuel demand. U.S. crude prices settled 3.1% lower at
$88.91 a barrel.
Canadian government bond yields were lower across a flatter
curve, with the 10-year falling 12.5 basis points to
3.476%.
(Reporting by Fergal Smith; editing by Jonathan Oatis)
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