Canadian dollar hits 1-week low as virus outbreaks hit sentiment

TORONTO: The Canadian dollar weakened on Tuesday for a second day against its broadly stronger US counterpart, as investors weighed the potential impact of new coronavirus outbreaks in Asia on global economic recovery.

The loonie was trading 0.2% lower at 1.2364 to the greenback, or 80.88 US cents, after touching its weakest intraday level since last Tuesday at 1.2387.

The safe-haven US dollar rallied as Australia and some countries in Asia reimposed lockdowns to contain the spread of the highly infectious Delta variant of the virus.

Oil reversed earlier losses, rising 1% to $73.55 a barrel, but copper, seen as a gauge of global financial health, fell for a fourth day. Canada is a major producer of both commodities.

Canadian GDP data for April is due on Wednesday and the US nonfarm payroll report is due on Friday.

The US data could offer clues on the Federal Reserve's policy outlook. The US central bank rattled markets earlier this month, shifting to more hawkish guidance.

Canadian government bond yields were higher across a steeper curve, tracking the move in US Treasuries. The 10-year rose 2.3 basis points to 1.439%.