Canadian dollar flat vs. weaker U.S. dollar as oil and equity drops weigh

Tue Mar 21, 2017 5:33pm EDT
 
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By Alastair Sharp

TORONTO (Reuters) - The Canadian dollar ended little changed against a broadly weaker U.S. counterpart on Tuesday and fell against other major currencies as lower oil prices and sharp stock market falls weighed.

The loonie, as Canada's currency is colloquially known, had hit its strongest level in three weeks in morning trade after the release of stronger-than-expected domestic retail sales.

"It feels like it's weak even though it's flat," said David Bradley, director of foreign exchange trading at Scotiabank. "If you look at it from the crosses, euro-Canada or sterling-Canada, they've rallied significantly today."

Prices for oil, one of Canada's major exports, fell as fresh glut fears pushed U.S. crude to its lowest since November.

The Canadian dollar CAD=D4 settled at C$1.3359 to the greenback, or 74.86 U.S. cents, barely weaker than Monday's close of C$1.3354, or 74.88 U.S. cents and just off its weakest intraday level.

It had touched its strongest since Feb. 28 at C$1.3265, after Canadian retail sales rebounded in January with the largest gain in nearly seven years. The 2.2 percent increase topped economists' expectations for a gain of 1.1 percent, while volumes were also robust, up 1.3 percent.

Recent signs of long-awaited strengthening of domestic economic growth probably came too late to help Finance Minister Bill Morneau trim yawning annual deficits when the federal budget is released on Wednesday.

The U.S. dollar .DXY sunk to a six-week low against a basket of major currencies after centrist Emmanuel Macron's performance in a television debate raised expectations he would win France's presidential election over the far-right's Marine Le Pen, boosting the euro.   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