The Canadian dollar was little changed against its U.S. counterpart on Wednesday, holding near its weakest level since July, as the recent sell-off in oil lost some momentum and the greenback declined broadly.
The price of oil, one of Canada’s major exports, rose on hopes for output cuts after a steep drop a day earlier, while a gauge of global stock markets fell for a fifth straight session as declines in tech and financial shares pressured Wall Street.
U.S. crude oil futures settled 1 per cent higher at $56.25 a barrel.
“Oil has stabilized, but there are other fears out there,” said Eric Theoret, a currency strategist at Scotiabank. “It’s really not an environment where you expect the Canadian dollar to do well.”
In addition to being a commodities exporter, Canada runs a current account deficit, so its economy could be hurt if the global flow of trade or capital slows.
The overall perceived risk to the Canadian financial system has increased slightly over the last six months, in part due to unease over the global economic outlook, the Bank of Canada said.
At 4:02 p.m. EST (2102 GMT), the Canadian dollar was trading nearly unchanged at 1.3234 to the greenback, or 75.56 U.S. cents. The currency earlier matched Tuesday’s low of 1.3264, which was its weakest in nearly four months.
The U.S. dollar declined against a basket of currencies as British Prime Minister Theresa May obtained backing from her cabinet on her Brexit deal, boosting the euro and sterling.
Data showing U.S. consumer prices grew in line with analysts forecasts in October also weighed on the greenback. It reinforced the view domestic inflation is increasing at a moderate pace.
Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year rose 6.5 Canadian cents to yield 2.27 per cent and the 10-year climbed 24 Canadian cents to yield 2.428 per cent.