(Adds details throughout; updates prices) * Canadian dollar dips 0.2% against greenback *
(Adds details throughout; updates prices)
*
Canadian dollar dips 0.2% against greenback
*
Touches weakest level since Nov. 4 at 1.3705
*
Canadian wholesale trade rises 2.1% in October
*
Canadian bond yields trade mixed across steeper curve
TORONTO, Dec 16 (Reuters) – The Canadian dollar weakened
to a six-week low against its U.S. counterpart on Friday, as
investors grew more concerned about prospects for the global
economy following interest rate increases by a number of major
central banks this week.
The loonie was trading 0.2% lower at 1.3690 to the
greenback, or 73.05 U.S. cents, after touching its weakest level
since Nov. 4 at 1.3705. For the week, it was down 0.3%, its
third straight weekly decline.
“It’s been a pretty exciting week for markets,” Shaun
Osborne, chief currency strategist at Scotiabank, said in a
note. “Risk aversion continues to influence CAD moves heavily.”
Wall Street’s main stock indexes extended losses as fears of
a looming recession sparked by the Federal Reserve’s relentless
battle against inflation hammered sentiment.
U.S. business activity contracted further in December as new
orders slumped to the lowest level in just over 2-1/2 years.
Canada sends about 75% of its exports to the United States,
including oil.
U.S. crude prices settled 2.4% lower at $74.29 a
barrel.
Canadian economic data was a bright spot. It showed
wholesale trade increasing 2.1% in October from September,
beating estimates for a 1.3% gain.
The Bank of Canada says that the economy remains overheated
despite evidence that rate hikes have helped cool some sectors
of the economy, such as housing.
Canada’s consumer price index report for November, due to be
released next Wednesday, could help guide expectations for
additional central bank tightening. Economists expect inflation
to slow to an annual rate of 6.6% from 6.9% in October.
Canadian government bond yields were mixed across a steeper
curve, tracking the move in U.S. Treasuries.
The 2-year eased 4.3 basis points to 3.653%,
while the 10-year was up 2.1 basis points at 2.810%.
(Reporting by Fergal Smith; Editing by Susan Fenton and Paul
Simao)
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