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Canadian dollar weakens 0.3% against the greenback
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Flash estimate shows factory sales up 0.7% in July
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Price of U.S. oil rises 0.1%
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Canadian bond yields rise across the curve
By Fergal Smith
TORONTO, Aug 24 (Reuters) – The risk-sensitive Canadian dollar weakened on Thursday against its broadly stronger U.S. counterpart as equity markets fell, but the currency’s move stopped short of the three-month low it hit the previous day.
The loonie was trading 0.3% lower at 1.3570 to the greenback, or 73.69 U.S. cents, after trading in a range of 1.3511 to 1.3587. On Wednesday, it touched its weakest intraday level since May 31 at 1.3603.
“For most of this year, the CAD has been more correlated with equity market sentiment then Canada’s largest export, crude oil,” said Tony Valente, senior FX dealer at AscendantFX.
“Today is no different, as the drift lower in equity markets is a headwind for the CAD.”
Wall Street’s main indexes fell as investors turned cautious ahead of Federal Reserve Chair Jerome Powell’s speech later this week that will offer clues on the interest rate path.
The price of oil rose 0.1% to $78.96 a barrel, while the U.S. dollar rallied against a basket of major currencies.
Canadian factory sales rose 0.7% in July from June largely due to increases in the petroleum and coal product, food, and primary metal subsectors, Statistics Canada said in a flash estimate. It follows a flash estimate for retail sales on Wednesday which also showed growth in July.
Canadian government bond yields were higher across the curve, tracking moves in U.S. Treasuries and recouping some of the previous day’s sharp declines. The 10-year rose 5 basis points to 3.697%. (Reporting by Fergal Smith, Editing by Nick Zieminski)
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