TORONTO (Reuters) - The Canadian dollar weakened on Thursday to a nearly three-week low against its U.S. counterpart as oil prices fell and investors flocked to the greenback.
The price of oil, one of Canada’s major exports, dipped after U.S. President Donald Trump called for OPEC to boost crude output in an effort to lower prices that were headed for their best quarterly gains in a decade. U.S. crude oil futures settled 0.2 percent lower at $59.30 a barrel.
The U.S. dollar rose as other currencies were weakened by dovish signals from central banks.
“It’s the ‘big dollar’ all the time,” said Michael Goshko, corporate risk manager at Western Union Business. “Data in the U.S. is the cleanest dirty shirt in the pile. There are signs of global slowing all around, but the last one to be hitting the skids seems to be the U.S.”
Markets have been on edge after yield curves in the United States and Canada inverted last week for the first time in more than a decade, potentially signaling more gloomy economic prospects.
Investors trying to work out whether the inversion of the U.S. yield curve signals a looming recession may find clues - but little comfort - in the Canadian bond market, which is less distorted by central bank buying.
At 4:14 p.m. (2014 GMT), the Canadian dollar was trading 0.2 percent lower at 1.3440 to the greenback, or 74.40 U.S. cents. The currency touched its weakest level since March 8 at 1.3451.
The decline for the loonie came ahead of data on Friday that is expected to show no growth in Canada’s economy for the month of January.
Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The two-year fell 6.5 Canadian cents to yield 1.493 percent and the 10-year declined 21 Canadian cents to yield 1.556 percent.
On Wednesday, the 10-year yield hit its lowest intraday since June 2017 at 1.508 percent.
Reporting by Fergal Smith; Editing by David Gregorio and Peter Cooney