TORONTO — The Canadian dollar weakened to
its lowest level in more than two months against its U.S.
counterpart on Thursday as oil prices fell and the prospect of
aggressive tightening by the Federal Reserve weighed on investor
Wall Street seesawed and the U.S. dollar remained at
an elevated level against a basket of major currencies as a slew
of economic data pointed to resilience of the U.S. economy.
That likely keeps the Federal Reserve on track for
aggressive interest rate hikes to tame inflation.
Oil, one of Canada’s major exports, was pressured by
expectations of weaker demand, with U.S. crude oil futures
falling 3% to $85.80 a barrel
The Canadian dollar was trading 0.1% lower at 1.3180 to the
greenback, or 75.87 U.S. cents, after touching its weakest
intraday level since July 14 at 1.3213.
Meanwhile, Canada’s average resale home price fell 3.9% from
a year ago in August but was up 1.2% on the month as the market
appeared to stabilize in the Greater Toronto Area.
A series of rapid interest rate hikes by the Bank of Canada
has pressured Canada’s previously red-hot housing market in
As investors weigh how much further the BoC will tighten,
the level of underlying inflation is likely to be a better
signpost than the central bank’s much scrutinized estimate of
the neutral interest rate, economists say.
Canadian government bond yields were higher across a flatter
curve, tracking the move in U.S. Treasuries.
The 2-year touched its highest since December
2007 at 2.835% before dipping to 3.790%, up 3 basis points on
the day, while the 10-year was up 1.3 basis points
(Reporting by Fergal Smith; editing by Jonathan Oatis)