C$ weakens as wildfire disrupts energy producers

Tue May 17, 2016 10:03am EDT
 
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TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Tuesday as a wildfire threatened some oil sand facilities in Alberta, although losses were tempered by higher crude prices and domestic manufacturing data that was less weak than feared.

Canadian energy producers were hit with fresh disruptions after a massive wildfire around the oil sands hub of Fort McMurray, Alberta, shifted north, forcing the evacuation of about 4,000 people from work camps.

Canadian factory sales fell 0.9 percent in March from February on weakness in transportation equipment and primary metals, data from Statistics Canada showed. The decline was smaller than forecast, however, and sales rose 0.1 percent in constant-dollar terms.

At 9:23 a.m. EDT (1323 GMT), the Canadian dollar CAD=D4 was trading at C$1.2941 to the greenback, or 77.27 U.S. cents, weaker than Monday's close of C$1.2896, or 77.54 U.S. cents.

The currency's strongest level of the session was C$1.2837, while its weakest was C$1.2954.

The Canadian dollar has weakened from a 10-month high of C$1.2461 earlier this month, pressured by a bleaker outlook for the economy after a strong start to 2016. Last week it touched C$1.3016, its weakest in one month.

Oil rose to a seven-month high, supported by outages in Nigeria and Canada. U.S. crude CLc1 prices were up 0.67 percent at $48.04 a barrel. [O/R]

U.S. consumer prices recorded their biggest increase in more than three years in April, pointing to a steady inflation build-up that could give the Federal Reserve ammunition to raise interest rates later this year.

Canadian government bond prices were higher across the maturity curve, with the two-year CA2YT=RR up 0.5 Canadian cent to yield 0.562 percent and the benchmark 10-year CA10YT=RR rising 21 Canadian cents to yield 1.292 percent.   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