TORONTO, Aug 31 (Reuters) - The Canadian dollar sank against the U.S. currency on Monday as the price of oil dropped on weaker Chinese and European equities, stoking concerns about the pace of economic recovery.
The Shanghai Composite Index, a barometer of economic health that has recently influenced other stock markets around the world, lost more than 6 percent. [MKT/GLOB] [ID:nN31427833]
"The market looks to China as an indicator of global growth going forward," said Camilla Sutton, currency strategist at Scotia Capital. "Any time we some evidence of weakness in global growth going forward it does weigh on the Canadian dollar."
At 7:38 a.m. (1138 GMT), the Canadian dollar was at C$1.1043 to the U.S. dollar, or 90.56 U.S. cents, down from C$1.0919 to the U.S. dollar, or 91.58 U.S. cents at Friday's close.
Another factor weighing on the unit was the price of oil, a key Canadian export, which fell toward $71 a barrel [ID:nSYD487149], as well as general flow-driven weakness, said Sutton.
She added the market may draw direction from gross domestic product data, due at 8:30 a.m. The data is expected to show the Canadian economy has started a slow crawl back to health after the sharpest three-quarter recession in 50 years. [ID:nN27314779]
Canadian bond prices were mostly higher across the curve on Monday morning, tracking the big U.S. Treasury market where debt prices climbed in Europe on Monday as a slump in equities boosted safe-haven bids. [ID:nLV158024] (Reporting by Jennifer Kwan, Editing by Chizu Nomiyama)
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