TORONTO, – The Canadian dollar weakened against its U.S. counterpart on Thursday, with the currency tracking declines in risk-sensitive assets such as stocks and commodities even as preliminary domestic data showed wholesale trade rising in November.
The loonie was trading 0.4% lower at 1.3665 to the greenback, or 73.18 U.S. cents, after moving in a range of 1.3572 to 1.3684.
“It has basically been a risk-off move, with weaker equity and commodity markets pushing the USD broadly higher,” said George Davis, chief technical strategist at RBC Capital Markets.
The safe-haven U.S. dollar rose against a basket of major currencies and Wall Street stocks tumbled as U.S. economic data fueled worries that the Federal Reserve would stick to its aggressive tightening path.
Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to shifts in investor sentiment.
Oil pulled back from a 2-week high as worries about the demand outlook outweighed the impact of tighter U.S. crude stocks due to a winter storm. U.S. crude futures were down 0.7% at $77.71 a barrel.
Canadian wholesale trade rose 1.9% in November from October, largely reflecting higher sales in the motor vehicles and parts subsector, Statistics Canada said in a flash estimate.
It follows mixed inflation data for the same month on Wednesday that left the door open for another interest rate increase by the Bank of Canada in January.
The loonie has fallen 7.6% since the start of the year. That’s less than for most other G10 currencies but nearly all of the decline has occurred since August.
Canadian government bond yields were higher across the curve. The 10-year touched its highest level since Nov. 30 at 3.070% before dipping to 3.067%, up 4.5 basis points an the day.
Source : Yahoo