TORONTO (Reuters) - The Canadian dollar weakened to a two-week low against its U.S. counterpart on Thursday, pressured by broader gains for the greenback, lower oil prices and weaker-than-expected domestic manufacturing data.
Canadian manufacturing sales unexpectedly fell by 0.8 percent in October from September on widespread weakness, indicating fourth-quarter growth could be sluggish, Statistics Canada data showed.
Analysts polled by Reuters had expected sales to increase by 0.4 percent from September.
The U.S. dollar .DXY charged to a 14-year high and government bond yields rose sharply after the Federal Reserve on Wednesday hiked U.S. interest rates and signaled more would follow at a faster pace next year.
Prices of oil, a major Canadian export, fell. A stronger U.S. dollar, in which oil is traded, tends to hit crude demand as it makes fuel purchases more expensive for users of other currencies.
U.S. crude CLc1 prices were down 1.61 percent at $50.22 a barrel.
At 9:20 a.m. EST (1420 GMT), the Canadian dollar CAD=D4 was trading at C$1.3373 to the greenback, or 74.78 U.S. cents, weaker than Wednesday's close of C$1.3274, or 75.34 U.S.
The currency's strongest level of the session was C$1.3269, while it touched its weakest since Dec. 1 at C$1.3376.
Sales of Canadian homes fell 5.3 percent in November from October, a report from the Canadian Real Estate Association showed.
Canadian government bond prices were mixed across a steeper yield curve, with the two-year CA2YT=RR price flat to yield 0.808 percent and the benchmark 10-year CA10YT=RR falling 15 Canadian cents to yield 1.812 percent.
The 2-year yield fell 3.1 basis points below its U.S. equivalent to a spread of -46.3 basis points.
Strategists expect the spread to widen to as much as 80 basis points by the end of 2017 as the Bank of Canada shows no desire to follow Fed increases.
The Bank of Canada will release its financial system review at 10:30 a.m. EST (1530 GMT) assessing the key risks to the country's financial system. Investors will look to see if the risks from high household debt and high home prices have increased.
Reporting by Fergal Smith; Editing by Nick Zieminski