TORONTO (Reuters) - The Canadian dollar weakened against the U.S. currency on Monday, hurt by a slide in the price of oil that dampened the prospects for Canadian energy exporters.
Brent crude oil fell below $85 a barrel on Monday after Goldman Sachs slashed its price forecasts, citing abundant supply and lackluster demand despite a pick-up in global economic growth. [O/R]
“Particularly for the Canadian dollar here, it’s oil prices,” said Shaun Osborne, chief currency strategist at TD Securities. “That is going to be a headwind.”
The Canadian dollar CAD=D4 traded as low as C$1.1255 to the U.S. currency, or 88.85 U.S. cents - its weakest level since Thursday - compared with Friday’s close of C$1.1233 to the U.S. dollar, or 89.02 U.S. cents.
Osborne said in the near term, he expects the currency to hold to its recent range of C$1.12 to C$1.13 to the greenback.
Traders are looking ahead to testimony by Bank of Canada Governor Stephen Poloz to the Senate banking committee on Oct. 29. His testimony had been scheduled for last week but was canceled due a gunman’s attack on Parliament Hill.
Outside of Canada, investors are also looking to this week’s meeting of the U.S. Federal Reserve’s rate-setting committee, which is expected to reinforce its willingness to wait a long while before hiking interest rates.
Canadian government bond prices were mixed, with the two-year CA2YT=RR up half a Canadian cent to yield 1 percent. The benchmark 10-year CA10YT=RR was unchanged and yielded 2.018 percent.
Editing by Bernadette Baum