The Canadian dollar CADUSD weakened against its U.S. counterpart on Thursday, giving back some recent gains, as oil prices tumbled and the rally in equity markets lost some momentum.
The loonie was trading 0.6 per cent lower at 1.3765 to the greenback, or 72.65 U.S. cents after moving in a range of 1.3678 to 1.3776. On Wednesday, it touched its strongest intraday level since Nov. 6 at 1.3652.
“The loonie is falling on weaker oil and a paring back on risk sentiment,” said Amo Sahota, director at Klarity FX in San Francisco. “The former is the key driver today.”
The price of oil, one of Canada’s major exports, dropped to its lowest level since July 7 as investors worried about global demand following weak data from the U.S. and Asia. U.S. crude oil futures settled 4.9 per cent lower at $72.90 a barrel.
Wall Street’s main indexes edged lower after some disappointing earnings forecasts and data showing U.S. weekly jobless claims rising more than expected, but a drop in U.S. Treasury yields kept the decline in stocks in check.
Domestic data showed that housing starts unexpectedly rose in October, climbing 1 per cent compared with the previous month.
Canadian government bond yields fell across the curve, tracking moves in U.S. Treasuries. The 10-year touched its lowest level since Sept. 14 at 3.662 per cent before recovering to 3.692 per cent, down 6 basis points on the day.