The Canadian dollar weakened against its U.S. counterpart on Tuesday as oil and stocks consolidated recent gains, with the loonie pulling back from its strongest intraday level in nearly two weeks.
U.S. stock index futures dipped as investors moved to the sidelines a day after Wall Street closed at all-time highs, while the price of oil, one of Canada’s major exports, pulled back from near 13-month highs.
U.S. crude prices were down 0.8 per cent at $57.53 a barrel, while the Canadian dollar was trading 0.2 per cent lower at 1.2759 to the greenback, or 78.38 U.S. cents.
The loonie was the only G10 currency not to gain ground against the greenback. Earlier in the session, it touched its strongest intraday level since Jan. 27 at 1.2712.
The U.S. dollar was firmly pinned at a one-week low as an overnight slide in U.S. Treasury yields raised doubts on the outlook for the greenback against the backdrop of a looming U.S. fiscal stimulus package.
Bank of Canada Deputy Governor Timothy Lane is due to speak on Wednesday which could offer some clues on the interest rate outlook. Some strategists expect the central bank to scale back its bond purchases as soon as April.
Canadian government bond yields were mixed across a flatter curve in sympathy with U.S. Treasuries. The 10-year fell about 1 basis point to 1.002 per cent after touching on Monday its highest intraday level since March last year at 1.027 per cent.
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