C$ weakens as wildfire threatens oil sands facilities

Wed May 18, 2016 9:43am EDT
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TORONTO (Reuters) - The Canadian dollar weakened against its broadly firmer U.S. counterpart on Wednesday as a wildfire threatened oil sands facilities in Alberta, while global oil prices seesawed.

Hot and dry weather and strong winds were expected to push a massive wildfire near Fort McMurray, Alberta eastward on Wednesday, threatening facilities and work camps in the prized oil sands region.

Economists had already been expecting a sharp slowdown in Canada's economy after a strong start to 2016.

Lengthening the timeline for oil production to return to normal levels could add downside risk to the outlook, according to a research note on Wednesday from BMO Capital Markets, which projects flat growth in the second quarter.

Global oil prices seesawed after hitting 2016 highs in the previous session, as the impact of unplanned supply disruptions in Nigeria and Canada was tempered by rising supplies elsewhere. U.S. crude CLc1 prices were up 0.08 percent to $48.35 a barrel.

The U.S. dollar rose to a three-week high against a basket of major currencies after Federal Reserve officials on Tuesday played up chances of interest rate hikes this year. The focus now turns to the minutes from the last Federal Open Market Committee later on Wednesday.

At 9:25 a.m. EDT (1325 GMT), the Canadian dollar CAD=D4 was trading at C$1.2977 to the greenback, or 77.06 U.S. cents, weaker than Tuesday's close of C$1.2903, or 77.50 U.S. cents.

The currency's strongest level of the session was C$1.2903, while its weakest was C$1.2994. Last week it touched C$1.3016, its weakest in one month.

Foreign investment in Canadian securities climbed for a third straight month as foreigners bought a net C$17.17 billion ($13.25 billion) worth of securities in March, mainly in bonds, Statistics Canada said.   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