(Adds analyst quotes and details throughout; updates prices)
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Canadian dollar weakens 0.7% against the greenback
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Trades in a range of 1.3504 to 1.3695
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Canadian exports fall 2.9% in August
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10-year yield rises 14.9 basis points to 3.277%
TORONTO, Oct 5 (Reuters) – The commodity-linked Canadian
dollar weakened against its U.S. counterpart on Wednesday as the
greenback broadly climbed and domestic data showed exports
falling in August, with the loonie losing ground despite higher
oil prices.
The Canadian dollar was down 0.7% at 1.36 to the
greenback, or 73.53 U.S. cents, after trading in a range of
1.3504 to 1.3695. The currency was pulling back from its
strongest intraday level in 11 days on Tuesday at 1.3501.
“It appears to be a wave of broad U.S. dollar buying,” said
Erik Nelson, a currency strategist at Wells Fargo in New York.
“Notably the rebound in oil prices and equities is providing
only minimal support to the Canadian dollar here against a
resilient greenback.”
The U.S. dollar rallied against a basket of major
currencies as data showed that U.S. private employers stepped up
hiring in September and the Reserve Bank of New Zealand lifted
interest rates to a seven-year high, promising more pain to
come.
The stance of New Zealand’s central bank contrasted with a
dovish turn by the Reserve Bank of Australia on Tuesday, which
helped boost investor sentiment globally on hopes other central
banks would ease off on tightening.
The RBNZ’s move dispelled “some expectation of a central
bank rate pivot,” Shaun Osborne, chief currency strategist at
Scotiabank, said in a note.
Canada’s trade surplus narrowed to C$1.5 billion ($1.1
billion) in August as exports dropped 2.9%.
One of Canada’s major exports is oil. It added to its gains
in recent days as OPEC+ agreed to its deepest cuts to production
since the 2020 COVID-19 pandemic.
U.S. crude prices settled 1.4% higher at $87.76 a
barrel, while Canadian government bond yields were higher across
a steeper curve, tracking the move in U.S. Treasuries.
The 10-year rose 14.9 basis points to 3.277%.
(Reporting by Fergal Smith; Editing by Andrea Ricci and
Jonathan Oatis)
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