The Canadian dollar weakened slightly against the greenback on Tuesday, retreating from a near seven-week high the day before, as worries about Brexit resurfaced and domestic data showed a surprise decline in manufacturing shipments.
Canadian factory sales decreased by 0.7 per cent in October from September as the United Auto Workers’ strike in the United States weighed on transportation equipment sales, Statistics Canada said. Analysts had forecast no change.
“We had some weak manufacturing numbers,” said Hosen Marjaee, senior portfolio manager at Manulife Asset Management. “That took a little bit of wind out of our (the loonie’s) sails.”
The Bank of Canada has said that it will take into account the impact on the economy of trade conflicts when making its interest rate decisions.
Clues for the rate outlook could come from Canada’s inflation report for November, which is due for release on Wednesday.
The U.S. dollar rose against a basket of major currencies amid concerns about Britain’s setting a hard deadline to reach a new trade deal with the European Union.
At 2:56 p.m., the Canadian dollar was trading 0.1 per cent lower at 1.3164 to the greenback, or 75.96 U.S. cents. The currency traded in a range of 1.3147 to 1.3185.
On Monday, the loonie notched its strongest intraday level since Oct. 30 at 1.3115 after a trade deal between the United States and China.
Hopes that the U.S.-China trade deal will bolster oil demand in 2020 and the prospect of lower U.S. crude supplies supported the price of oil, one of Canada’s major exports. U.S. crude oil futures were up 1.20 per cent at $60.93 a barrel.
Canadian government bond prices were lower across the yield curve, with the two-year down 2.5 cents to yield 1.708 per cent and the 10-year falling 9 cents to yield 1.643 per cent.
On Friday, the 10-year yield touched its highest intraday level in nearly seven months at 1.695 per cent.
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