Friday, 03 July 2015 18:21
OTTAWA: The Canadian dollar weakened against the greenback on Friday as oil prices slipped and as data showed service sector activity slowed in China, a major consumer of commodities.
Investors were also wary of taking aggressive bets heading into Sunday’s Greek referendum on the country’s bailout terms with lenders. An opinion poll showed supporters of the terms have taken a slim lead.
Talks between Greece and international lenders collapsed last weekend, causing Greece to miss a payment to the International Monetary Fund earlier this week. The fallout from the referendum could determine whether the country remains in the euro zone.
A combination of the uncertainty surrounding Greece, dissapointing Canadian economic data and soft oil prices has seen the Canadian dollar lose more than 2 percent since last Friday.
At 8:59 a.m. ET (1259 GMT), the Canadian dollar was trading at C$ 1.2584 to the greenback, or 79.47 US cents, weaker than the Bank of Canada’s official close of C$ 1.2545, or 79.71 US cents.
The currency’s strongest level of the session was C$ 1.2538, while its weakest level was C$ 1.26. Still, the loonie did not fall as far as the two-and-a-half-month low it hit on Thursday.
US crude prices were down 0.44 percent to $ 56.68, while Brent crude lost 0.39 percent to $ 61.83.
Activity in China’s services sector slowed to its lowest in five months in June, data showed, suggesting the economy needs further policy support.
Canadian government bond prices were higher across the maturity curve, with the two-year price up 3.5 Canadian cents to yield 0.472 percent and the benchmark 10-year rising 35 Canadian cents to yield 1.704 percent.
The Canada-US two-year bond spread was -16.3 basis points, while the 10-year spread was -68.2 basis points.
