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The Canadian dollar CADUSD weakened against its U.S. counterpart on Tuesday as currency markets unwound some recent sharp moves that had pressured the greenback and despite domestic data showing a wider-than-expected trade surplus in September.

The loonie was trading 0.4% lower at 1.3754 to the greenback, or 72.71 U.S. cents, after trading in a range of 1.3691 to 1.3782. On Monday, it touched its strongest intraday level in nearly three weeks at 1.3627.

The U.S. dollar gained on Tuesday against a basket of major currencies as a sharp selloff last week was seen as overdone in the short term.

There was some short covering last week in currencies such as the euro and sterling “that drove some aggressive moves, and now we are seeing a reversal of that”, said Erik Nelson, a macro strategist at Wells Fargo Securities in London.

A sharp decline in the price of oil, one of Canada’s major exports, was another headwind for the Canadian currency. U.S. crude oil futures settled 4.3% lower at $77.37 a barrel as mixed Chinese data added to investor concerns about the demand outlook.

Canada’s trade surplus with the world increased twice as much as forecast in September to C$2.04 billion ($1.48 billion), as higher crude prices helped exports gain for a third straight month.

Canadian government bond yields fell across a flatter curve, tracking moves in U.S. Treasuries. The 10-year was down 7.3 basis points at 3.743%, trading well below the 16-year peak it touched in October at 4.292%.

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