Canadian dollar hits new 14-month low as stops triggered

Tue May 2, 2017 9:40am EDT
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By Fergal Smith

TORONTO (Reuters) - The Canadian dollar weakened on Tuesday to a fresh 14-month low against its U.S. counterpart as stop loss orders were triggered, extending recent pressure on the currency amid a more uncertain trade outlook and lower oil prices.

"This is simply a move to try and wipe out stops ahead of the day really getting rolling," said Brad Schruder, director of corporate sales and structuring at BMO Capital Markets.

"This is a lay up trade right now to sell Canada almost across the board."

The pullback in oil prices below $50 a barrel, domestic mortgage market concerns and an uncertain outlook for the North American Free Trade agreement have weighed on the loonie recently, while the market is also bracing for a Federal Reserve interest rate decision on Wednesday.

The U.S. Federal Reserve is expected to hold interest rates steady at its meeting this week as it pauses to parse more economic data but may hint it is on track for an increase in June.

In contrast, the Bank of Canada has signaled it is in no hurry to raise interest rates.

U.S. crude CLc1 prices were down 0.10 percent at $48.79 a barrel despite news of lower production by Russia and Organization of the Petroleum Exporting Countries.

Oil is one of Canada's major exports.   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