Thursday, July 29

Canadian dollar slips to three-month low


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The Canadian dollar fell to near a

three-month low against its US counterpart on Thursday, hurt

by dismal economic data and weakness in oil prices.

The loonie found little support from Bank of Canada Governor

Tiff Macklem’s comments in a media interview that the central

bank will tackle inflation to get it back on target if temporary

price pressures become persistent, but that it was not automatic

that it would raise interest rates.

At 3:40 pm EDT (1940 GMT), the Canadian dollar was

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trading 0.8% lower at 1.2604 to the greenback, or 79.34 US

cents, its lowest level since April 21.

Canada’s scorching hot housing market is starting to cool,

as buyers shift their focus from getting more space to getting

back to normal after the COVID-19 pandemic, and the fear of

missing out in the market fades into a prevailing sense of “wait

and see.”

Separately, Canada lost 294,200 jobs in June, mainly on a

plunge in service-sector jobs in industries hit hard by COVID-19

restrictions, a report from payroll services provider ADP showed

on Thursday.

The Canadian dollar was also hurt by weakness in the price

of oil, one of Canada’s major exports. Oil fell 1% on

expectations of more supply after a compromise agreement between

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leading OPEC producers and following a surprisingly poor weekly

reading on US fuel demand.

The Canadian currency fell a day after the Bank of Canada’s

said it was cutting the scope of its bond-buying program but

holding its key interest rate at a record low.

“A case of sell the rumor, buy the news was apparent

following the BoC announcement on Wednesday,” Ronald Simpson,

managing director of global currency analysis at Action

Economics, said in a note.

Canadian bond yields fell across the yield curve, with the

10-year down about 3 basis points at 1.262%.

(Reporting by Saqib Iqbal Ahmed

Editing by Paul Simao)

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