The Canadian dollar weakened against its U.S. counterpart on Wednesday, pulling back from a near three-week high earlier in the session, as the greenback steadied following disappointing U.S. manufacturing data a day earlier.
At 9:25 a.m., the Canadian dollar was trading 0.2 per cent lower at 1.3250 to the greenback, or 75.47 U.S. cents. The currency touched its strongest intraday level since Sept. 12 at 1.3207.
The U.S. dollar edged higher against a basket of major currencies after data on Tuesday showing a shock contraction in U.S. manufacturing activity knocked it off two-year highs.
The U.S. manufacturing data confirmed that the domestic economy was feeling the burn from a prolonged trade war between the United States and China.
The Bank of Canada has worried that the U.S.-China trade conflict is weighing more heavily on the global economy, but has showed no appetite for cutting rates amid steady domestic activity.
Canada’s trade report for August is due on Friday, which could help guide expectations for the central bank’s interest rate outlook.
The price of oil, one of Canada’s major exports, gave up its earlier gains as depressed global markets offset industry data showing a surprise drop in U.S. crude inventories. U.S. crude oil futures were down 0.1 per cent at $53.55 a barrel.
Canadian government bond prices were higher across a steeper yield curve in sympathy with U.S. Treasuries. The two-year rose 6 cents to yield 1.50 per cent and the 10-year was up 17 cents to yield 1.334 per cent.
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