TORONTO (Reuters) - The commodity-linked Canadian dollar weakened to a four-month low against its U.S. counterpart on Monday as worries that the coronavirus outbreak would slow global economic growth overshadowed stronger-than-expected domestic housing data.
Global shares .WORLD sank as the death toll from a coronavirus outbreak exceeded that of the SARS epidemic of two decades ago.
Canada is a major producer of commodities, including oil, so its economy could be hurt by a slowdown in global growth.
U.S. crude oil futures CLc1 were down 0.8% at $49.90 a barrel on weaker Chinese oil demand in the wake of the virus outbreak and as traders waited to see if Russia would join other producers in seeking further output cuts.
At 9:46 a.m. (1446 GMT), the Canadian dollar CAD=D4 was trading 0.1% lower at 1.3321 to the greenback, or 75.07 U.S. cents. The currency, which fell 0.5% last week, touched its weakest intraday level since Oct. 10 at 1.3330.
Speculators have slashed their bullish bets on the Canadian dollar to a five-week low, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of Feb. 4, net long positions had fallen to 18,563 contracts from 34,590 in the prior week.
Canadian housing starts rose by 8.8% in January compared with the previous month to 213,224 units as groundbreaking increased on multiple unit urban homes, data from he Canadian Mortgage and Housing Corporation showed on Monday. Economists had expected starts to rise to 205,000.
“January’s positive print is consistent with our forecast calling for residential investment to support overall growth in the first quarter,” Rishi Sondhi, an economist at TD Bank Group, said in a research note.
Separate data, from Statistics Canada, showed that the value of Canadian building permits rose by 7.4% in December from November.
It follows data on Friday showing that Canada added 34,500 jobs in January, more than twice the number markets were expecting, which prompted investors to reduce bets that the Bank of Canada would cut interest rates as soon as next month.
Bank of Canada Governor Stephen Poloz, who is due to step down in June, will speak on Thursday in Melbourne, Australia.
Canadian government bond yields were lower across the yield curve in sympathy with U.S. Treasuries. The 10-year yield CA10YT=RR fell 2.6 basis points to 1.304%.
Reporting by Fergal Smith; Editing by Andrea Ricci
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