TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Monday after a drop in the price of oil, one of Canada’s major exports, and a broad rise for the greenback.
Renewed prospects of U.S. tax cuts that could boost the economy have helped lift the U.S. dollar .DXY against a basket of major currencies, while a violence-marred independence vote in Spain’s Catalonia region weighed on the euro.
U.S. crude oil CLc1 was down 2.63 percent at $50.31 a barrel as a rise in U.S. drilling and higher output from the Organization of the Petroleum Exporting Countries put the brakes on a rally that brought the biggest third-quarter price gain in 13 years.
At 9:28 a.m. ET (1328 GMT), the Canadian dollar CAD=D4 was trading at C$1.2505 to the greenback, or 79.97 U.S. cents, down 0.3 percent.
The currency traded in a range of C$1.2466 to C$1.2524. It touched a four-week high at C$1.2531 on Friday, when data showing that Canada’s economy stalled in July further dampened prospects of another interest rate hike by the central bank this month.
The Bank of Canada raised rates in July and September after the country’s growth accelerated in the first half of the year, but speeches by the bank’s policymakers have helped talk down the Canadian dollar in recent weeks after the currency’s strength put growth at risk.
Still, speculators have raised bullish bets on the loonie to their highest since November 2012, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday.
As of Sept. 26, Canadian dollar net long positions had climbed to 74,605 contracts from 58,846 a week earlier.
Canadian government bond prices were mixed across the yield curve, with the two-year CA2YT=RR down 1.5 Canadian cents to yield 1.527 percent and the 10-year CA10YT=RR rising 1 Canadian cent to yield 2.097 percent.
Last week, the 10-year yield touched a three-year high at 2.202 percent.
Central bank Deputy Governor Sylvain Leduc will speak on Tuesday on productivity in the Canadian economy.
Canada’s trade data for August is due on Thursday, and the September employment report is set for release on Friday.
Reporting by Fergal Smith; Editing by Lisa Von Ahn