The loonie was trading nearly unchanged at 1.2665 to the greenback, or 78.96 U.S. cents, after trading in a range of 1.2640 to 1.2677.
On Tuesday, it hit its weakest level in nearly eight weeks at 1.2744, pressured by recent volatility in the price of oil and speculation that the Federal Reserve will speed up tapering of its bond-buying program.
“The CAD remains at the mercy of external factors and sentiment to a large extent at the moment we believe,” strategists at Scotiabank, including Shaun Osborne, said in a note.
“Liquidity will, of course, thin significantly after European markets close later this morning,” the strategists added.
With U.S. markets closed for Thanksgiving, much of the focus was on Europe where a surge in COVID-19 cases is raising the prospect of lockdowns going into the Christmas shopping season.
The price of oil, one of Canada’s major exports, edged lower as investors eyed how major producers respond to the U.S.-led emergency oil release designed to cool the market. U.S. crude prices were down 0.3 per cent at $78.13 a barrel.
Canadian payroll employment rose by 91,100 in September, the fourth consecutive monthly increase, Statistics Canada said.
Floods that wiped out bridges, roads and rail lines in British Columbia will hurt Canada’s economic growth and fuel inflation in the fourth quarter, but the Bank of Canada’s rate-hike timing is likely to remain unchanged, economists said.
Canadian government bond yields were lower across a flatter curve, with the 10-year dipping 1.9 basis points to 1.764 per cent. On Wednesday, it touched its highest intraday level since April 2019 at 1.826 per cent.
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