Canadian Dollar Posts Weekly Loss On ‘Bleakening’ Global Outlook

The Canadian dollar steadied against its U.S. counterpart on Friday, holding near its weakest level in more than a week, as oil prices fell and investors worried that surging COVID-19 cases would hurt the global economy.

The Canadian dollar was trading nearly unchanged at 1.3140 to the greenback, or 76.10 U.S. cents, having touched its weakest intraday level since Nov. 5 at 1.3172. For the week, the currency was down 0.6%.

The loonie “is very open to global growth conditions and the U.S. economy, both of which have been subject to bleakening outlooks in the short-term,” said Simon Harvey, FX market analyst for Monex Europe and Monex Canada.

Weighing on growth prospects have been “rising COVID infections and the lack of immediate U.S. fiscal stimulus,” Harvey said.

Investors see the likelihood of policy gridlock in Washington if the election earlier this month results in a split Congress.

Canada sends about 75% of its exports to the United States, including oil. U.S. crude oil futures settled 2.4% lower at $40.13 a barrel, pressured by swelling output from Libya and fears that rising coronavirus infections may crimp fuel demand.

The loonie has pulled back from a two-year high on Monday when it was boosted by promising data from a large COVID-19 vaccine study.

Canadian industrial product prices were up 1% in October compared to the same month last year, a preliminary estimate from Statistics Canada showed on Friday.

Canadian government bond yields were mixed across a steeper curve. The 10-year yield rose 1.2 basis point to 0.731%, having touched its highest since April 9 at 0.813%.

– Reuters