TORONTO: The Canadian dollar weakened to a two-week low against its US counterpart on Thursday, as commodity-linked currencies extended this week's losses after solid gains over recent months.
The US dollar climbed against a basket of major currencies, with most of its gains coming against the commodity-linked currencies, such as the Australian dollar and its Canadian counterpart as investors took profits.
Losses for the loonie came as data showed Toronto home sales plummeted in July from a year earlier and prices were down nearly 19 percent from April as government moves to cool a long housing boom in Canada's largest city spooked buyers.
A slowdown in the country's housing market could weigh on Canada's economy and reduce the number of additional interest rate increases from the Bank of Canada that the market expects, after the central bank hiked last month for the first time in nearly seven years.
Economist expect the Bank of Canada to raise rates a further three times by the end of 2018.
At 9:39 a.m. ET (1339 GMT), the Canadian dollar was trading at C$1.2593 to the greenback, or 79.41 US cents, down 0.2 percent.
The currency's strongest level of the session was C$1.2566, while it touched its weakest since July 20 at C$1.2618.
The loonie has rallied 9.5 percent since early May. It touched last week its strongest in more than two years at C$1.2414.
But the recent upsurge in Canada's dollar will fade in coming months on prospects the Bank of Canada sounds less hawkish on interest rate hikes and fails to keep pace with the US Federal Reserve, a Reuters poll found.
Prices of oil, one of Canada's major exports, rose as signs of a tightening US market offset ample supplies from Organization of the Petroleum Exporting Countries producers.
US crude prices were up 0.58 percent at $49.88 a barrel.
Canadian government bond prices were higher across the yield curve in sympathy with US Treasuries.
Comments
Comments are closed.