The oil-linked Canadian dollar weakened against the greenback on Monday as the price of U.S. crude slumped to a record low at well below zero, with the loonie posting the second biggest decline among G10 currencies.
At 3:29 p.m., the Canadian dollar was trading 1 per cent lower at 1.4115 to the greenback, or 70.85 U.S. cents. The currency traded in a range of 1.4020 to 1.4137.
Among G10 currencies, only the Norwegian krone lost more ground. Canada and Norway are both major oil producers.
“The primary story is just the oil story,” said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets. “It has certainly crimped CAD for today and may well for tomorrow too.”
“North American oil is trading with much more problems than oil for delivery in other places,” Anderson said.
The front-month contract for U.S. crude, which is due to expire on Tuesday, settled $55.90 lower at minus $37.63 a barrel, having turned negative for the first time in history as declining storage space discouraged buyers.
Brent crude was down 8.9 per cent at $25.57.
Meanwhile, Canada’s province of Ontario forecast 20,000 cases of the novel coronavirus by the end of the month, a quarter of the number it had projected just three weeks ago. But the country’s chief medical officer warned that it is not yet time to ease up on quarantine measures.
Authorities across Canada have ordered the closure of non-essential businesses, throwing millions out of work.
Ottawa is rolling out more than C$200 billion of economic support measures, while the Bank of Canada has slashed interest rates by 150 basis points since March and begun buying Canadian government bonds.
Last week, the central bank said it would broaden its asset-purchase, or quantitative easing, program to include provincial and corporate debt.
Canadian government bond yields were mixed across the curve on Monday, with the 10-year falling by less than one basis point to 0.638 per cent.
Canadian wholesale trade increased 0.7 per cent in February from January on stronger sales in the motor vehicles and motor vehicle parts and accessories subsector, Statistics Canada said. Analysts had forecast a 0.5 per cent decrease.
In separate data, the Teranet-National Bank Composite House Price Index showed prices of single-family homes were up 0.6 per cent in March from February.
Canada’s inflation report for March is due on Wednesday.
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