The Canadian dollar weakened against its U.S. counterpart on Thursday, retreating from near a three-year high the day before, as the greenback rallied against a basket of major currencies, while data showed Canada’s trade deficit narrowing in November.
The loonie was trading 0.3 per cent lower at 1.2710 to the greenback, or 78.68 U.S. cents. The currency traded in a range of 1.2663 to 1.2733. On Wednesday, it touched its weakest level since April 2018 at 1.2626.
The U.S. dollar bounced off its lowest levels since 2018 to its highest in a week, its gains attributed partly to safe-haven buying after supporters of President Donald Trump stormed the U.S. Capitol and profit-taking by investors who had been betting on the euro.
Canada’s trade deficit narrowed to $3.3 billion in November from a revised $3.7 billion in October as exports increased and imports edged down, data from Statistics Canada showed.
One of Canada’s major exports, oil, was supported by a fall in U.S. stockpiles and strength in the wake of a pledge by Saudi Arabia to cut output more than had been expected.
U.S. crude oil futures were up 0.2 per cent at $50.72 a barrel, while global shares and U.S. bond yields rose on bets of more pandemic-related financial relief under a Democratic-controlled U.S. Congress.
Canadian government bond yields were higher across much of a steeper curve. The 10-year was up 2.7 basis points at 0.785 per cent, its highest since Dec. 8.
Canada’s jobs report for December is due on Friday. It could offer clues on the strength of the domestic economy as a second wave of the coronavirus sweeps across the country.
On Wednesday, the province of Quebec said it will impose a curfew starting on Saturday and extend an existing lockdown through Feb. 8 to curb the spread of the virus.
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