(Adds strategist quotes and details throughout, updates prices) * Canadian dollar weakens 0.5% against the greenback
(Adds strategist quotes and details throughout, updates prices)
*
Canadian dollar weakens 0.5% against the greenback
*
Foreign investors sell Canadian securities in September
*
U.S. oil prices settle 1.9% lower
*
Canadian bond yields rise across inverted curve
TORONTO, Nov 18 (Reuters) – The Canadian dollar weakened
against its U.S. counterpart on Friday, with the currency adding
to this week’s decline as oil prices fell and data showed the
largest divestment of Canadian securities by foreign investors
in nearly four years.
The loonie was trading 0.5% lower at 1.3390 to the
greenback, or 74.68 U.S. cents, after touching its weakest level
since Nov. 10 at 1.3409.
Among G10 currencies, only the Norwegian crown posted
a larger decline. Norway, like Canada, is a major producer of
oil.
For the week, the loonie was down 1%. It follows four
straight weeks of gains.
“I think fundamentals are reasserting themselves,” said Eric
Theoret, global macro strategist at Manulife Investment
Management. “When you got crude prices trading the way they are,
that’s going to hit the CAD.”
U.S. crude oil futures settled 1.9% lower at $80.08 a
barrel, extending their pullback from a peak of $93.74 earlier
this month, due to concern about weakened demand in China and
further increases to U.S. interest rates.
Foreign investors sold a net C$22.3 billion ($16.7 billion)
in Canadian securities in September, the largest divestment
since December 2018.
Separate data showed producer prices in Canada rose 2.4% in
October from September.
To tackle inflation, the Bank of Canada has lifted interest
rates to a 14-year high of 3.75%.
Canada is facing pressure to reverse its decision to end
issuing real return bonds, a product pension plans rely on to
ensure that inflation does not erode the assets they set aside
to pay benefits to retirees.
Canadian bond yields rose across a more deeply inverted
yield curve.
The 10-year increased nearly one basis point to
3.122%, while it was trading one basis point further below the
2-year to a gap of roughly 83 basis points.
(Reporting by Fergal Smith; Editing by Alison Williams and
Richard Chang)
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