CANADA FX DEBT -Canadian dollar falls biggest in 2 months as oil prices slump
The Canadian dollar weakened against its U.S. counterpart on Thursday, posting its biggest drop since early March, as oil prices fell and U.S. data pointed to a further slowdown in the economy.
The loonie was down 0.8% to trade at C$1.3490 against the greenback, or 74.13 cents, its biggest drop since March 7. He traded between 1.3364 and 1.3495.
“It seems to be a combination of low oil prices and reaction to US PPI and early claims,” said Amo Sahota, director of Clarity FX in San Francisco.
The number of Americans filing new claims for jobless benefits rose to a 1-1/2-year high last week, while producer prices rose slightly in April.
The data came in line with most economists’ expectations of a recession by the end of the year. Canada sends 75% of its exports to the US, including oil.
Oil prices fell 2.3% due to the political impasse over the US debt ceiling, while Wall Street came under pressure from another decline in the regional banking sector.
Meanwhile, the US dollar rose against a basket of major currencies on losses in the British pound, despite another Bank of England rate hike.
Sahota said the British pound sell-off “spread demand for the USD across the majors”.
Canadian government bonds followed US Treasuries by falling in a flat curve. The 10-year bond yield fell 7.8 basis points to 2.828%. (Reporting by Fergal Smith; Editing by Leslie Adler)
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