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The Canadian dollar fell to a nearly 18-month low against its U.S. counterpart on Thursday, as oil and stock prices declined and investors slashed bets that the Bank of Canada would raise interest rates as soon as January.

Expectations for more interest rate hikes in Canada tumbled after Bank of Canada Governor Stephen Poloz said the central bank would need to assess the impact of lower oil prices and as a new threat emerged to U.S.-China trade relations.

Chances of an interest rate hike at the central bank’s next meeting in January slumped to 10 per cent from about 60 per cent before an interest announcement on Wednesday, when the central bank left its benchmark interest rate on hold at 1.75 per cent and was more dovish than some investors expected.

“The statement from the bank earlier this week was one of the main factors pushing the Canadian dollar lower, on top of, as you can imagine, the stock market weakness,” said Simon Côté, managing director, risk management solutions, National Bank Financial.

Stocks fell as the arrest of a top Chinese technology executive stirred fears of fresh tensions between the United States and China over trade.

Canada exports many commodities, including oil, so its economy could be hurt if the global flow of trade or capital slows.

U.S. crude oil futures settled 2.7 per cent lower at $51.49 a barrel after major oil producers ended a meeting without announcing a decision to cut crude output.

At 3:56 p.m., the Canadian dollar was trading 0.1 per cent lower at 1.3371 to the greenback, or 74.79 U.S. cents. The currency hit its weakest intraday level since June 12, 2017 at 1.3445.

The decline for the loonie came as data showed that Canada’s trade deficit widened in October to $1.17 billion. Separate data showed that the pace of purchasing activity in Canada expanded at a slower pace in November.

Canada’s employment report for November is due on Friday.

The Canadian dollar will rally over the coming year if oil prices recover and the Bank of Canada continues lifting interest rates, according to a poll of currency strategists who have become less bullish on prospects for the currency.

Canadian government bond prices were higher across the yield curve, with the 10-year rising 43 cents to yield 2.084 per cent. The 10-year yield touched its lowest intraday since Dec. 28 at 2.026 per cent.

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