The Canadian dollar weakened on Thursday to its lowest level against the greenback in nearly two weeks, on fears of a global slowdown and ahead of domestic jobs data on Friday that could guide Bank of Canada interest rate expectations.
U.S. stocks and the price of oil sank on fears that the United States and China would not be able to reach a trade deal with less than a month left in their fragile truce, adding to worries about a slowdown in global growth.
U.S. crude oil futures settled 2.5 per cent lower at $52.64 a barrel.
“Energy commodities are getting hit pretty hard across the board,” said Colin Cieszynski, chief market strategist at SIA Wealth Management. “As a petrocurrency, the Canadian dollar often sees weakness from that.”
Canada is a major producer of commodities, including oil, so its economy could be hurt by a global economic slowdown.
At 3:29 p.m. (2029 GMT), the Canadian dollar was trading 0.6 per cent lower at 1.3298 to the greenback, or 75.20 U.S. cents. The currency touched its weakest level intraday since Jan. 25 at 1.3317.
Canada’s employment report for January is due on Friday. On Wednesday, Ivey Purchasing Managers Index data for January showed a decline in its measure of employment.
The Bank of Canada said in January that low oil prices, which have led to production cuts in Alberta, and a weak housing market harmed the economy in the fourth quarter of 2018 and would continue to do so in the first quarter of this year.
Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries, with the two-year up 10 Canadian cents to yield 1.76 per cent and the 10-year rising 46 Canadian cents to yield 1.87 per cent.
The two-year yield touched its lowest intraday since Jan. 3 at 1.758 per cent.