Canadian dollar near one-month low amid U.S. slowdown concerns

Published On: October 5, 2019Categories: Trading1.5 min read

The Canadian dollar was little changed against the greenback, hovering near an earlier one-month low, as U.S. services sector activity slowed

The Canadian dollar was little changed against the greenback on Thursday, hovering near an earlier one-month low, as data showing weaker U.S. services sector activity supported bets for Federal Reserve interest rate cuts.

At 3:23 p.m. (1923 GMT), the Canadian dollar was trading nearly unchanged at 1.3335 to the greenback, or 74.99 U.S. cents. The currency, which fell on Wednesday by the most in seven months, touched its weakest intraday level since Sept. 3 at 1.3348.

The U.S. data “helped pull CAD off its lows but with very little conviction,” said Shaun Osborne, chief currency strategist at Scotiabank.

Osborne said that on talking to people out there at the moment he thinks most people feel that things could move either way in the blink of an eye.

The U.S. dollar declined against a basket of major currencies as investors fretted about a slowdown in the world’s largest economy.

Investors were also worried about the potential for a tit-for-tat transatlantic trade war.

Canada exports many commodities, including oil, so its economy could be hurt by a weaker outlook for global trade.

U.S. crude oil futures fell 0.4% to $52.45 a barrel, pressured by concerns about global economic growth, oil demand and signs of excess supply despite OPEC-led cuts.

Canada’s trade report for August is due on Friday, which could help guide expectations for the Bank of Canada’s interest rate outlook.

The central bank has worried that trade uncertainty, including the dispute between the United States and China, is weighing more heavily on the global economy, but has showed no appetite for cutting interest rates amid steady domestic activity.

Canadian government bond prices were higher across the yield curve, with the two-year up 13 Canadian cents to yield 1.416% and the 10-year rising 59 Canadian cents to yield 1.244%.

The 10-year yield touched its lowest intraday level since Sept. 5 at 1.236%.

About the Author: Jonathan Adams

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