Canadian dollar weakens 0.5% against the greenback
Touches its strongest in one month at 1.3467
Canada’s trade balance swings to a deficit in November
Canadian bond yields rise across curve
TORONTO, Jan 5 (Reuters) – The Canadian dollar weakened against its U.S. counterpart on Thursday, pulling back from a one-month high, as investors worried about the Federal Reserve’s policy outlook and data showed Canada’s trade balance swinging to a deficit.
The loonie CAD= was trading 0.5% lower at 1.3540 to the greenback, or 73.86 U.S. cents, after touching its strongest intraday level since Dec. 5 at 1.3467.
U.S. stock index futures fell and the U.S. dollar .DXY rallied against a basket of major currencies after a greater-than-expected rise in U.S. private employment dented optimism that the Fed would dial back its hawkish stance.
U.S. and Canadian employment reports, due on Friday, could offer further clues on the outlook for interest rates. Economists expect Canada to add 8,000 jobs in December.
Money markets see a roughly 60% chance that the BoC would hike rates by 25 basis points at its next policy decision on Jan. 25.
Canada posted a trade deficit of C$41 million ($30.3 million) in November after a revised surplus of C$130 million in October, data from Statistics Canada showed.
A decline in energy products contributed to a drop in exports, while imports also fell.
The price of oil CLc1 was up 0.4% at $73.14 a barrel, after sharp declines over the previous two days.
Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries. The 10-year CA10YT=RR rose 4.4 basis points to 3.187%.
(Reporting by Fergal Smith Editing by Bernadette Baum)
((fergal.smith@thomsonreuters.com; +1 647 480 7446;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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