C$ hits new 11-year low on oil slump, Fed outlook
By Fergal Smith
TORONTO (Reuters) - The Canadian dollar fell to its weakest in more than 11 years on Monday, pressured by a slump in crude oil prices and the likely start of Federal Reserve monetary policy tightening next week, while longer-dated maturities led bond prices higher.
"The move lower in oil prices is weighing on the Canadian dollar," said Andrew Kelvin, senior fixed-income strategist at TD Securities.
Crude oil futures tumbled to their lowest in nearly seven years on Monday after the Organization of the Petroleum Exporting Countries failed to address a growing supply glut.
U.S. crude CLc1 prices settled at $37.65 a barrel, down 5.8 percent, while Brent crude LCOc1 lost 5.6 percent to $40.70 a barrel. [O/R]
Disappointing Canadian employment and trade data on Friday suggested the economy was off to a weak start in the final quarter of 2015 after just recently emerging from a mild recession.
"There's every reason to expect the Canadian dollar to depreciate further versus the U.S. dollar ahead of what's widely expected to be a rate hike in the U.S. next week," said Kelvin.
The Canadian dollar CAD=D4 ended the day trading at C$1.3513 to the greenback, or 74.00 U.S. cents, much weaker than Friday's close of C$1.3377, or 74.76 U.S. cents.
The currency's strongest level of the session was C$1.3363, while it hit its weakest since mid-2004 at C$1.3524. Continued...