C$ weakens even as U.S. crude stabilizes

Mon Dec 21, 2015 5:09pm EST
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TORONTO/OTTAWA (Reuters) - The Canadian dollar weakened slightly against the greenback on Monday with a lack of liquidity and last week's significant decline leading to a tight trading range.

The Canadian dollar has lost about 20 percent for 2015 so far, putting it on track for its worst year since the global financial crisis in 2008. The loonie has been pummeled by the slide in oil, two interest rate cuts by the Bank of Canada and favor for its U.S. counterpart as the Federal Reserve started raising rates.

The currency touched a more than 11-year low of C$1.4003 on Friday before backing off the psychologically important level.

"That's the big line in the sand right now, that C$1.40 level," said Scott Smith, senior market analyst at Cambridge Global Payments.

"Unless we see oil take a nose dive heading into the holidays, I think C$1.40 or just around there will be well defended and it will likely be the beginning of January before we get some more decisive price action to whether or not U.S. dollar-Canadian dollar moves materially higher."

The Canadian dollar CAD=D4 ended the North American session at C$1.3965 to the greenback, or 71.61 U.S. cents, weaker than Friday's close of C$1.3945, or 71.71 U.S. cents.

Brent crude prices hit their lowest in more than 11 years on Monday, hounded by a relentless rise in global supply that looks set to outpace demand again next year. [O/R]

U.S. crude CLc1 prices settled up 1 cent at $34.74 a barrel while Brent crude LCOc1 lost 53 cents to $36.35.

The domestic economic calendar is light this week except for Wednesday's release of economic growth and retail sales for October.   Continued...

A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. REUTERS/Mark Blinch