C$ weakens to five-week low as oil and stocks fall
By Fergal Smith
TORONTO (Reuters) - The Canadian dollar fell on Tuesday, touching its weakest level in five weeks against its U.S. counterpart as a drop in stock and commodity markets weighed on the risk-sensitive commodity-linked currency.
World stock markets and energy prices fell after energy producers and consumers predicted an oil glut was likely to persist well into next year.
U.S. crude CLc1 prices settled $1.39 lower at $44.90 a barrel. [O/R]
A capitulation of investor bets that reach for yield added to pressure on higher yielding commodity currencies, such as the Canadian dollar, said Mazen Issa, senior fx strategist at TD Securities.
The commodity-linked Canadian dollar CAD=D4 ended at C$1.3170 to the greenback, or 75.93 U.S. cents, much weaker than the Bank of Canada's official close on Monday of C$1.3049, or 76.63 U.S. cents.
The currency's strongest level of the session was C$1.3030, while it touched its weakest since Aug. 9 at C$1.3190.
The Canadian dollar underperformed many major currencies, although it gained against fellow commodity currencies, the Australian and New Zealand dollars, as well as some emerging market currencies, such as the Brazilian real and the Mexican peso.
Canada can lead the process of global economic recovery by setting standards for other countries to aspire to, the International Monetary Fund's Managing Director Christine Lagarde said. Continued...