The Canadian dollar sagged on Wednesday to a near two-week low against its U.S. counterpart which staged a broad advance as the price of oil, one of Canada’s major exports, sank, taking some steam out of a recent rally.
At 3:24 p.m. (1924 GMT), the Canadian dollar was trading 0.6 per cent lower at 1.4118 to the greenback, or 70.83 U.S. cents. The currency touched its weakest intraday level since April 23 at 1.4156.
Much of the Canadian dollar’s weakness “came in concert with oil price declines,” said Ronald Simpson, managing director, global currency analysis at Action Economics. “Further price declines would appear to be likely, which should continue to weigh on the CAD.”
U.S. crude oil futures rose close to a four-week high early, on hopes for a recovery in demand as some countries ease coronavirus lockdowns. Then futures slid, down 1.8 per cent to $24.11 a barrel, as U.S. crude inventories ticked up and gasoline demand remained below normal seasonal levels.
The U.S. dollar rose as investors sought refuge in safe-haven currencies in the wake of dire global economic numbers.
U.S. private payrolls data showed a record of more than 20 million jobs lost in April. Canada sends about 75 per cent of its exports to the United States.
Economists expected Canadian data to show jobs plunged by 4 million in April as non-essential business activity shut down across the country, adding to a jobs decline of 1 million in March. The jobs report is due on Friday.
Canadian bond yields rose across much of a steeper curve. The 10-year yield was up 5 basis points at 0.616 per cent after the U.S. Treasury Department sharply increased the size of its long-dated debt auctions to finance its rapidly expanding deficit.
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