Skip to main content

Market News Canadian dollar pulls back from 9-month high as oil prices fall

The Canadian dollar edged lower against its U.S. counterpart on Monday, retreating from Friday’s nine-month high, as oil prices were pressured by data showing China’s slowest economic growth in decades.

The price of oil, one of Canada’s major exports, fell as China’s data dimmed the outlook for crude demand. U.S. crude oil futures settled 1.1 per cent lower at $59.58 a barrel.

“Oil prices are lower and that obviously has a certain negative impact on the Canadian dollar,” said Rahim Madhavji, president of Knightsbridge Foreign Exchange.

Story continues below advertisement

At 3:36 p.m. (1936 GMT), the Canadian dollar was trading 0.1 per cent lower at 1.3049 to the greenback, or 76.63 U.S. cents. The currency, which on Friday touched its strongest intraday level since Oct. 25 at 1.3018, traded in a range of 1.3022 to 1.3052.

The modest decline for the loonie came as data from the Canadian Real Estate Association showed that resales of Canadian homes fell 0.2 per cent in June from the previous month.

Tightening of mortgage rules and interest rate hikes by the Bank of Canada have weighed on Canada’s once red-hot housing market. Still, Canadian borrowers have benefited in recent months from a slide in global bond yields.

Last week, the Bank of Canada said the housing market was stabilizing, as it left its benchmark interest rate steady at 1.75 per cent and made clear it had no intention of easing monetary policy.

The central bank’s stance has contrasted with dovish guidance last week from the U.S. Federal Reserve. Canada’s inflation report for June is due on Wednesday, which could offer further clues on the outlook for Canadian interest rates.

Speculators have raised bullish bets on the currency, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of July 9, net long positions rose to 9,226 contracts from 6,293 contracts in the prior week.

Canadian government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries. The two-year rose 2.5 Canadian cents to yield 1.568 per cent and the 10-year was up 20 Canadian cents to yield 1.588 per cent.

Story continues below advertisement

On Friday, the 10-year yield touched its highest intraday level in seven weeks at 1.649 per cent.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter