TORONTO — The Canadian dollar weakened to
its lowest level in nearly a week against its US counterpart
on Tuesday, as oil prices fell and investors grew cautious ahead
of an expected reduction of economic stimulus by the Federal
The loonie was trading 0.3% lower at 1.2403 to the
greenback, or 80.63 US cents, having touched its weakest level
since last Wednesday at 1.2424. In October, the currency was up
2.3%, its biggest gain since last November.
We are seeing some “consolidation of October’s gains,” said
Michael Goshko, corporate risk manager at Western Union Business
“The Canadian dollar doesn’t trade in a vacuum so when you
have a US dollar that’s a little stronger overall, the
Canadian dollar will get swept up with other currencies,” Goshko
The US dollar rallied against a basket of major
currencies as the Fed kicked off its two-day policy meeting
where it was expected to announce it will begin tapering its
massive asset purchases put in place at the start of the
Gains for the greenback came as the Reserve Bank of
Australia sounded a more dovish tone than investors had
anticipated, sending the Aussie to its biggest one-day loss
since Sept. 29.
Last week, the Bank of Canada said it could hike rates as
soon as April, three months earlier than previously thought.
The price of oil, one of Canada’s major exports, settled
0.2% lower at $83.91 a barrel ahead of weekly US supply
reports expected to show a rise in crude inventories.
Canadian government bond yields eased across the curve,
tracking the move in US Treasuries.
The Canadian 10-year yield fell 1.6 basis points
to 1.733%, after touching on Monday its highest intraday level
since May 2019 at 1.766%.
(Reporting by Fergal Smith; editing by Jonathan Oatis and