The Canadian dollar weakened to a one-week low against its U.S. counterpart on Thursday as the rally in global shares lost some momentum and ahead of a speech by Bank of Canada Senior Deputy Governor Carolyn Wilkins.
Global shares were on course to end their longest winning streak in over a year, one that has lifted them more than 10 per cent, as the post-U.S. election and coronavirus vaccine bull run paused.
Canada runs a current account deficit and is a major producer of commodities, including oil, so the loonie tends to be sensitive to the global flow of trade and capital.
U.S. crude oil futures were up 0.6 per cent at $41.69 a barrel, although gains were capped by tempered expectations of an early release of a vaccine and after the IEA raised doubts about a quick demand rebound amid surging coronavirus infections in Europe and the United States.
The Canadian dollar was trading 0.3 per cent lower at 1.3099 to the greenback, or 76.34 U.S. cents, having touched its weakest intraday level since last Thursday at 1.3111.
It was third consecutive day that the loonie has lost ground, after the currency notched on Monday a two-year high.
Wilkins, who is due to leave the Bank of Canada next month, will speak on the topic “Exploring Life Post-COVID.” The central bank will make the text available at 1:30 p.m. (18:30 GMT).
The Bank of Canada has signaled it will leave interest rates on hold at a record low of 0.25 per cent until at least 2023,
Canadian government bond yields were lower across a flatter curve in sympathy with U.S. Treasuries as Canada’s bond market reopened following the Remembrance Day holiday. The 10-year yield fell 1.8 basis points to 0.755 per cent.
On Tuesday, it touched a seven-month high at 0.803 per cent.
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