C$ weakens to one-week low as oil tumbles

Mon Aug 22, 2016 4:47pm EDT
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By Fergal Smith

TORONTO (Reuters) - The Canadian dollar weakened to a one-week low against its U.S. counterpart on Monday as lower oil prices offset solid domestic data, but losses were restrained as investor attention turned to a speech by Federal Reserve Chair Janet Yellen on Friday.

Hesitation ahead of Yellen's speech capped gains for the U.S. dollar .DXY against a basket of major currencies a day after a top Federal Reserve official made comments perceived as hawkish.

"I think it's going to be pretty directionless for the remainder of this week until we get through to Friday (when Yellen speaks)," said Mark Chandler, head of Canadian fixed income and currency strategy at RBC Capital Markets.

"There is a big question market on what we might get (from Yellen)," Chandler added, noting the inconsistency of recent comments by Fed officials.

U.S. crude oil futures settled down $1.47 at $47.05 a barrel on worries about burgeoning Chinese fuel exports, more Iraqi and Nigerian crude shipments and a rising U.S. oil rig count.

Canadian wholesale trade increased by 0.7 percent in June from May, the third consecutive monthly gain. Analysts surveyed by Reuters had forecast a 0.1 percent increase.

The Canadian dollar CAD=D4 closed at C$1.2950 to the greenback, or 77.22 U.S. cents, weaker than Friday's official close of C$1.2858, or 77.77 U.S. cents.

The currency's strongest level of the session was C$1.2874, while it touched its weakest since Aug. 15 at C$1.2965.   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