TORONTO — The Canadian dollar edged lower
against its broadly weaker U.S. counterpart on Thursday as a
drop in oil prices offset data showing that Canada’s trade
surplus widened in June.
The loonie was trading 0.1% lower at 1.2850 to the
greenback, or 77.82 U.S. cents, after moving in a range of
1.2819 to 1.2876. It was the only G10 currency to lose ground
against the U.S. dollar .
“The Canadian dollar is coming under pressure as a brutal
wave of selling grips crude markets,” said Karl Schamotta, chief
market strategist at Corpay.
“With (crude) inventories surging as the summer driving
season draws to a close, investors are betting prices could come
down further in the months ahead.”
U.S. crude oil futures settled down 2.3% at $88.54 a
barrel, the lowest level since before Russia’s invasion of
Ukraine in February. Oil is one of Canada’s major exports.
Canada’s trade surplus widened to C$5.1 billion ($4.0
billion) in June, beating analyst expectations, as exports rose
Canada’s employment report for July, due on Friday, could
offer further clues on the strength of the domestic economy.
Analysts expect the loonie to rally over the coming year,
betting the threat of recession will ease as the U.S. Federal
Reserve and the Bank of Canada likely wind down rate-hike cycles
in 2023, a Reuters poll showed.
Canadian government bond yields eased across a more deeply
inverted curve. The 10-year was down 5 basis points
at 2.669%, while it fell 4.7 basis points further below the
2-year to a gap of 51.2 basis points.
(Reporting by Fergal Smith
Editing by Tomasz Janowski and Frances Kerry)
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