TORONTO (Reuters) - The Canadian dollar weakened to a fresh 11-year low against the U.S. dollar on Friday as crude oil prices slid further, while U.S. data left the door open to a Federal Reserve rate hike next week.
Crude oil prices hit new seven-year lows as the International Energy Agency (IEA) warned global oversupply could worsen in the new year.
U.S. crude CLc1 prices were down 1.44 percent to $36.23 a barrel, while Brent crude LCOc1 lost 1.59 percent to $39.10.
World stocks were on the brink of a two-month low as beaten-down oil prices contributed to negative sentiment, while U.S. Treasuries, seen as a safe haven, rallied.
A solid rise in U.S. core retail sales suggested enough momentum in the economy for the Fed to raise interest rates next week for the first time in nearly a decade.
At 9:00 a.m. ET, the Canadian dollar CAD=D4 was trading at C$1.3672 to the greenback, or 73.14 U.S. cents, weaker than Thursday’s close of C$1.3632, or 73.36 U.S. cents.
The currency’s strongest level of the session was C$1.3625, while at its low it hit its weakest since June 2004 at C$1.3679.
Canadian government bond prices were higher across the maturity curve, with the two-year CA2YT=RR price up 4 Canadian cents to yield 0.524 percent and the benchmark 10-year CA10YT=RR rising 21 Canadian cents to yield 1.464 percent.
The Canada-U.S. two-year bond spread was 0.8 of a basis point wider at -41.1 basis points, while the 10-year spread was 1.4 basis points narrower at -73.7 basis points as Treasuries outperformed at the long end of the curve.
Canadian Finance Minister Bill Morneau will make an announcement in Ottawa at 9:30 a.m. EST amid speculation the government will tighten mortgage rules in an effort to cool the country’s housing boom.
Reporting by Fergal Smith; Editing by Meredith Mazzilli