Skip to main content

The Canadian dollar weakened to an eight-week low against its broadly stronger U.S. counterpart on Thursday as oil prices fell and the Federal Reserve left intact its plans to gradually raise interest rates.

The Fed said ongoing strong job gains and household spending had kept the economy on track, but it did not explicitly take stock of recent volatility in U.S. equity markets.

“It didn’t raise rates today but it seems like they are still on the path to higher rates … which causes the loonie to decline a little bit,” said Hosen Marjaee, senior managing director, Canadian fixed income at Manulife Asset Management.

Story continues below advertisement

Higher U.S. interest rates could reduce investor incentive to buy lower-yielding Canadian bonds. The gap between Canada’s 5-year yield and its U.S. equivalent widened by 3.1 basis points to a spread of 63.5 basis points in favour of the U.S. bond.

The U.S. dollar climbed against a basket of major currencies, while U.S. crude oil futures settled 1.6 per cent lower at $60.67 a barrel as investors focused on swelling global crude supply.

Oil is one of Canada’s major exports.

At 3:30 p.m. (2030 GMT), the Canadian dollar was trading 0.4 per cent lower at 1.3163 to the greenback, or 75.97 U.S. cents. The currency touched its weakest level since Sept. 10 at 1.3183.

Canadian housing starts rose in October to a seasonally adjusted annual rate of 205,925 units from September’s upwardly revised 189,730 units. Economists had expected starts to rise to 200,000.

In separate data, new home prices in Canada were unchanged in September for the second month in a row, Statistics Canada said.

Canadian government bond prices were mixed across a slightly flatter yield curve. The 10-year rose 1 Canadian cent to yield 2.537 per cent.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter