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Canadian dollar hits 2-month low as oil prices slide

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TORONTO — The Canadian dollar weakened to

its lowest level in more than two months against its U.S.

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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.

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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

recent months.

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

at 3.172%.

(Reporting by Fergal Smith; editing by Jonathan Oatis)

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