Canadian dollar dips as oil drop offsets U.S. election uncertainty

Wed Nov 2, 2016 4:46pm EDT
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By Fergal Smith

TORONTO (Reuters) - The Canadian dollar weakened slightly against its U.S. counterpart on Wednesday as a sharp drop in oil prices offset broader losses for the greenback amid U.S. election uncertainty.

The U.S. dollar .DXY weakened against a basket of major currencies on nervousness about a potential victory for U.S. Republican presidential candidate Donald Trump next week.

"The pressure on the big (U.S.) dollar is buffering the downturn in oil and helping the Canadian dollar remain well pinned within its recent ranges over the past few days," said Scott Smith, senior market analyst at Cambridge Global Payments.

U.S. crude oil futures CLc1 settled $1.33 lower at $45.34 a barrel after a record weekly build in U.S. crude inventories stoked investor worries about a global supply glut. [O/R]

Oil is one of Canada's major exports.

The Canadian dollar CAD=D4 ended at C$1.3395 to the greenback, or 74.65 U.S. cents, slightly weaker than Tuesday's close of C$1.3393, or 74.67 U.S. cents.

The currency's strongest level of the session was C$1.3360, while its weakest was C$1.3423.

The Federal Reserve kept interest rates unchanged in its last policy decision before the U.S. election, but signaled it could hike rates in December as the economy gathers momentum and inflation picks up.   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