Skip to main content

The Canadian dollar fell to an eight-day low against its U.S. counterpart on Wednesday, as oil prices tumbled on fading alarm over an Iran rocket strike and the greenback broadly climbed.

At 2:46 p.m., the Canadian dollar was trading 0.2 per cent lower at 1.3029 to the greenback, or 76.75 U.S. cents. The currency touched its weakest intraday level since Dec. 31 at 1.3043.

“The weakness in oil prices has been a key contributor. Also, the strength in the U.S. dollar,” said Mathieu Savary, strategist at BCA Research.

Story continues below advertisement

The price of oil, one of Canada’s main exports, fell in a wild swing, soaring close to a four-month high in early trade on an Iranian rocket attack on U.S. forces in Iraq before retreating as Iran and the United States quickly ratcheted back tensions.

U.S. crude oil futures settled nearly 5 per cent lower at $59.61 a barrel, while strengthening of the U.S. dollar was led by gains against the safe-haven yen .

Some recent weak domestic economic indicators have also weighed on the Canadian dollar, Savary said. Official data on Tuesday showed that Canada’s exports and imports both declined in November.

Canada’s employment report for December is due on Friday. In November, the economy shed about 71,000 jobs.

Bank of Canada Governor Stephen Poloz is due to speak on Thursday, which could give investors clues on the interest rate outlook. The central bank left its benchmark interest rate on hold at 1.75 per cent in 2019, when the loonie was the top performing G10 currency, even as some other major central banks, such as the Federal Reserve and the European Central Bank, eased.

Canada is more dependent than some other countries, such as the United States, on trade. So the loonie could benefit from recent signs of global economic recovery and easing of trade tensions between the United States and China.

“Ultimately, we are in an environment that is cyclically likely to turn very favorable for the Canadian dollar,” Savary said.

Story continues below advertisement

Canadian government bond prices were lower across a steeper yield curve on Wednesday in sympathy with U.S. Treasuries. The two-year fell 5.5 cents to yield 1.670 per cent and the 10-year was down 42 cents to yield 1.630 per cent.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies