July 23, 2019 / 9:34 PM / 4 months ago

Canadian dollar hits one-month low as weak data triggers profit-taking

TORONTO (Reuters) - The Canadian dollar weakened to a near one-month low against its U.S. counterpart on Tuesday, as the greenback broadly rallied and as weaker-than-expected domestic data since the end of last week prompted investors to sell the currency.

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

At 4:17 p.m. (2017 GMT), the Canadian dollar CAD=D4 was trading 0.2% lower at 1.3142 to the greenback, or 76.09 U.S. cents.

The currency, which hit its weakest intraday level since June 26 at 1.3164, had been on a strong run since May. On Friday, it notched its strongest level in nearly nine months at 1.3016.

Since Friday, domestic data for May has showed a surprise decline in both retail sales and wholesale trade.

The weaker-than-expected data “is encouraging people to take some profits,” said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC. “At the same time, the U.S. dollar is enjoying broad-based strength ahead of what is expected to be an easier monetary policy from the ECB.”

The European Central Bank is expected to change its forward guidance towards easing this week, a Reuters poll showed.

The U.S. dollar .DXY was also boosted on Tuesday against a basket of currencies by a two-year deal between U.S. President Donald Trump and lawmakers to lift government borrowing limits to cover spending.

Meanwhile, the price of oil, one of Canada’s major exports, rose after the head of U.S. Central Command said the United States may have taken down a second Iranian drone over the Strait of Hormuz last week. U.S. crude oil futures CLc1 settled 1% higher at $56.77 a barrel.

Canadian government bond prices were lower across the yield curve, with the two-year CA2YT=RR down 3 Canadian cents to yield 1.453% and the 10-year CA10YT=RR falling 8 Canadian cents to yield 1.494%.

The 10-year yield touched its lowest intraday since July 4 at 1.454.

Reporting by Levent Uslu; Editing by Susan Thomas and Lisa Shumaker

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