The Canadian dollar fell to a near six-week low against its broadly stronger U.S. counterpart on Monday, as oil prices declined more than 4 per cent and rising coronavirus infections weighed on investor sentiment.
The loonie was trading 0.8 per cent lower at 1.3310 to the greenback, or 75.13 U.S. cents. The currency touched its weakest intraday level since Aug. 12 at 1.3320.
“The USD has caught a risk-off, safe-haven bid due to the turbulence in the equity markets,” said Tony Valente, a senior FX dealer at AscendantFX. “It seems that equity markets haven’t finished their September correction yet.”
Wall Street’s main indexes slid to seven-week lows as renewed lockdown measures in some countries due to the spread of the virus cast doubt over economic recovery.
The sell-off in oil, one of Canada’s major exports, intensified pressure on the loonie, Valente said.
U.S. crude oil futures settled 4.4 per cent lower at $39.31 a barrel as rising coronavirus cases stoked worries about global demand, while a potential return of Libyan production bolstered oversupply fears.
Canada has also seen a rise in coronavirus infections. On Saturday, Ontario, the country’s most-populous province, cracked down on private social gatherings.
Canadian new house prices rose 2.1 per cent year-over-year in August, which was the largest increase since March 2018, Statistics Canada said on Monday.
Canadian government bond yields were lower across a flatter curve in sympathy with U.S. Treasuries. The 10-year fell 2.9 basis points to 0.552 per cent.
Canadian Prime Minister Justin Trudeau is scheduled to unveil on Wednesday what he says is a far-reaching plan to help Canada recover from the coronavirus pandemic.
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.