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Market News Canadian dollar hits near one-week low as oil prices fall

The Canadian dollar weakened to a six-day low against its U.S. counterpart on Thursday as oil prices fell and investors grew skeptical about a potential thawing of trade tensions between the United States and China.

At 4:01 p.m. (2001 GMT), the Canadian dollar was trading 0.2 per cent lower at 1.3215 to the greenback, or 75.67 U.S. cents. The currency touched its weakest intraday level since last Friday at 1.3221.

Lower oil prices and investor skepticism about a U.S-China trade deal have “hammered” the loonie, said Alfonso Esparza, a senior currency analyst at OANDA.

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Oil prices fell after a media report cast doubt on the possibility of an interim U.S.-China trade deal and as a meeting of the OPEC+ alliance yielded no decision on deepening crude supply cuts. U.S. crude oil futures settled 1.2 per cent lower at $55.09 a barrel, extending this week’s decline.

The Bank of Canada worried last week, even as it left its benchmark interest rate on hold at 1.75 per cent, that the U.S.-China trade conflict has weighed more heavily than it previously thought on global economic momentum.

Meanwhile, data from Statistics Canada on Thursday showed that new home prices fell 0.1 per cent in July. Prices have been flat or falling since August 2018.

Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries and German Bunds, after the European Central Bank launched new stimulus but failed to live up to some dovish market expectations.

The two-year fell 2.5 Canadian cents to yield 1.603 per cent and the 10-year was down 23 Canadian cents to yield 1.45 per cent. The 10-year yield posted its highest intraday level since Aug. 1 at 1.471 per cent.

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