C$ falls with lower bond yields, cheaper oil

Tue Apr 18, 2017 4:57pm EDT
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By Alastair Sharp

TORONTO (Reuters) - The Canadian dollar fell to a more than one-week low against a broadly weaker U.S. counterpart on Tuesday as oil prices slipped and bond yields fell.

The loonie, as the Canadian currency is colloquially known, also lost ground versus a string of other currencies as oil, a major Canadian export, hit an 11-day low and a snap British election added to geopolitical jitters from North Korea to France.

"We've seen the Canadian dollar get slaughtered today," said Rahim Madhavji, president of KnightsbridgeFX.com, attributing some of the sharp move to a more somber reassessment of how quickly the Bank of Canada might move to raise rates.

"It's a surprising move, larger than what most people would expect, but it's really just correcting itself to where we were two weeks ago," he said.

The Canadian dollar CAD=D4 settled at C$1.3381 to the greenback, or 74.73 U.S. cents, weaker than the Bank of Canada's official close on Monday of C$1.3316, or 75.09 U.S. cents.

That weakness came even as the greenback hit a nearly three-week low against a basket of major currencies.

The loonie fell sharply against the British pound, which was at its strongest levels in months after British Prime Minister Theresa May surprised markets by calling an early election for June 8, and was also much weaker against the euro, Swiss franc and Japanese yen.

In a speech that did not discuss monetary policy, a senior Bank of Canada official said new technologies could help boost Canada's flagging productivity and income growth, but could also widen income inequality as some workers benefit from automation and others are hurt by it.   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