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Loonie touches near a five-month low at 1.3861
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For the week, the currency weakens 1.7%
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Canada adds 21,800 jobs in February
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Ten-year yield falls 15.9 basis points to 2.999%
TORONTO, March 10 (Reuters) – The Canadian dollar was
barely changed against its U.S. counterpart on Friday, holding
near a five-month low, as the failure of SVB Financial Group
spooked investors, offsetting stronger-than-expected domestic
jobs data.
The loonie was trading nearly unchanged 1.3830 to the
greenback, or 72.31 U.S. cents, after earlier touching its
weakest since Oct. 17 at 1.3861. For the week, the currency was
down 1.7%, its biggest weekly decline since September.
“The loonie is not catching any breaks this week,” said Amo
Sahota, director at Klarity FX in San Francisco.
“The narrowing of yield spreads was helping earlier in the
session but the ongoing fallout on equities led by the SVB
failure is just too much and high-beta FX has fallen.”
High-beta currencies tend to be more volatile than the
market as a whole.
Wall Street’s indexes fell as investors stressed out about
the health of U.S. banks broadly after regulators had to close
SVB, a high-profile lender to the technology sector.
The Canadian economy beat expectations by adding 21,800 jobs
in February, putting pressure on the Bank of Canada to consider
another rate hike after saying it wanted to end its year-long
tightening campaign.
On Wednesday, the BoC left its benchmark rate on hold at a
15-year high of 4.50%.
Meanwhile, the U.S. dollar fell against a basket of
major currencies after the U.S. unemployment report for February
showed inflation pressures were easing.
Canadian government bond yields were sharply lower across
the curve, tracking the move in U.S. Treasuries as investors
sought out safe havens.
The 10-year fell 15.9 basis points to 2.999%,
its lowest level since Feb. 9, while the price of oil,
one of Canada’s major exports, settled 1.3% higher at $76.68 a
barrel.
(Reporting by Fergal Smith; Editing by Paul Simao and Diane
Craft)
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