Canadian dollar hits two-week low against a surging greenback

Thu Dec 15, 2016 9:43am EST
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TORONTO (Reuters) - The Canadian dollar weakened to a two-week low against its U.S. counterpart on Thursday, pressured by broader gains for the greenback, lower oil prices and weaker-than-expected domestic manufacturing data.

Canadian manufacturing sales unexpectedly fell by 0.8 percent in October from September on widespread weakness, indicating fourth-quarter growth could be sluggish, Statistics Canada data showed.

Analysts polled by Reuters had expected sales to increase by 0.4 percent from September.

The U.S. dollar .DXY charged to a 14-year high and government bond yields rose sharply after the Federal Reserve on Wednesday hiked U.S. interest rates and signaled more would follow at a faster pace next year.

Prices of oil, a major Canadian export, fell. A stronger U.S. dollar, in which oil is traded, tends to hit crude demand as it makes fuel purchases more expensive for users of other currencies.

U.S. crude CLc1 prices were down 1.61 percent at $50.22 a barrel.

At 9:20 a.m. EST (1420 GMT), the Canadian dollar CAD=D4 was trading at C$1.3373 to the greenback, or 74.78 U.S. cents, weaker than Wednesday's close of C$1.3274, or 75.34 U.S.

The currency's strongest level of the session was C$1.3269, while it touched its weakest since Dec. 1 at C$1.3376.

Sales of Canadian homes fell 5.3 percent in November from October, a report from the Canadian Real Estate Association showed.   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