February 7, 2019 / 3:05 PM / 2 months ago

Canadian dollar hits one-week low as global growth concerns weigh

FILE PHOTO - A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. REUTERS/Mark Blinch

TORONTO (Reuters) - The Canadian dollar weakened to its lowest in more than one week against the greenback on Thursday, as fears of a global slowdown gripped investors and ahead of domestic jobs data on Friday that could guide Bank of Canada interest rate expectations.

U.S. stocks were pressured by a slew of dismal quarterly reports and a cut to the European Commission’s forecasts for economic growth.

Canada is a major producer of commodities, including oil, so its economy could be hurt by a slowdown in global growth.

Oil prices fell after data showing a rise in U.S. inventories weighed on sentiment already rattled by the global economy. U.S. crude prices were down 1 percent at $53.46 a barrel.

At 9:37 a.m. (1437 GMT), the Canadian dollar was trading 0.4 percent lower at 1.3265 to the greenback, or 75.39 U.S. cents. The currency touched its weakest level since Jan. 30 at 1.3280.

Canada’s employment report for January is due on Friday. On Wednesday, Ivey Purchasing Managers Index (PMI) data showed a declined in an employment measure that helped slow the expansion of purchasing activity in Canada more than expected to hit a four-month low in January.

The Bank of Canada said in January that low oil prices, which have led to production cuts in Alberta, and a weak housing market harmed the economy in the fourth quarter of 2018 and will continue to do so in the first quarter of this year.

Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year rose 8 Canadian cents to yield 1.771 percent and the 10-year climbed 41 Canadian cents to yield 1.876 percent.

Reporting by Fergal Smith; Editing by Bernadette Baum

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