TORONTO: The Canadian dollar weakened against its US counterpart on Monday as worries over an escalating trade dispute between the United States and other leading economies weighed on stocks.
At 9:22 a.m. EDT (1322 GMT), the Canadian dollar was trading 0.2 percent lower at C$1.3293 to the greenback, or 75.23 US cents.
The currency traded in a range between C$1.3270 and C$1.3315. On Friday, it touched its weakest in one year at C$1.3384.
Equity markets were pressured on Monday by a report saying that the US planned to bar many Chinese companies from investing in US technology firms and block additional technology exports to China.
Canada exports many commodities, including oil, and runs a current account deficit so its economy could also be hurt if the flow of trade or capital slows.
US crude prices were up 0.9 percent at $69.16 a barrel. Analysts said global oil markets would likely remain relatively tight this year despite the announcement on Friday of a production increase by major producers.
A higher oil price has helped offset data on Friday showing an unexpected plunge in Canada’s retail sales in April and flat inflation figures for May.
Chances of a Bank of Canada interest rate hike in July have fallen to less than 50 percent from about 70 percent before the data, the overnight index swaps market showed.
Still, speculators have cut bearish bets on the Canadian dollar for a second straight week, data from the US Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of June 19, net short positions dipped to 14,014 contracts from 14,988 a week earlier.
Canadian government bond prices were higher across the yield curve in sympathy with safe-haven assets such as Treasuries. The two-year rose 1 Canadian cent to yield 1.788 percent and the 10 years gained 11 Canadian cents to yield 2.112 percent.
The 10-year yield touched its lowest since April 2 at 2.099 percent.
Source: Brecorder
