TORONTO (Reuters) - The Canadian dollar weakened to a fresh 11-year low against the greenback on Tuesday, tracking additional losses for crude oil, while attention turned to a speech by Bank of Canada Governor Stephen Poloz in Toronto.
U.S. crude prices fell below $37 per barrel for the first time since early 2009 amid capacity storage fears as a global glut intensifies.
Sluggish Chinese trade data fed concern about slower global growth, while planned overhaul of mining company Anglo American’s business added to negative sentiment.
New tax measures announced by the Canadian government on Monday were accompanied by a projection increasing the likelihood the budged deficit will be higher than forecast.
Firm Canadian housing data did little to offset pressure on the Canadian dollar.
At 9:23 a.m. EST (1423 GMT), the Canadian dollar CAD=D4 was trading at C$1.3590 to the greenback, or 73.58 U.S. cents, weaker than the Bank of Canada’s official close of C$1.3513, or 74.00 U.S. cents.
The currency’s strongest level of the session was C$1.3496, while it hit its weakest level since mid-2004 at C$1.3623.
U.S. crude CLc1 prices were down 1.65 percent to $37.03 a barrel, while Brent crude LCOc1 lost 1.40 percent to $40.16.[O/R]
Canadian government bond prices were higher across the maturity curve, with the two-year CA2YT=RR price up 6.5 Canadian cents to yield 0.566 percent and the benchmark 10-year CA10YT=RR rising 20 Canadian cents to yield 1.498 percent, approaching the near five-week low hit last week at 1.487 percent.
The Canada-U.S. two-year bond spread was 2.7 basis points wider at -36.1 basis points, trading at its deepest negative spread since June 2007 as Canada’s 2-year bond outperformed.
The value of building permits surged by a higher-than-expected 9.1 percent in October from September, the first increase in three months, according to data from Statistics Canada.
Seasonally adjusted housing starts were 211,916 in November, compared with a revised 197,712 units in October, according to Canada Mortgage and Housing Corporation.
Bank of Canada Governor Poloz will give a speech on “The Evolution of Unconventional Monetary Policy,” with a news conference to follow. The text of the speech will be released at 12:35 p.m. EST (1735 GMT).
Reporting by Fergal Smith; Editing by Meredith Mazzilli