TORONTO: The Canadian dollar edged lower against its U.S. counterpart on Tuesday as equity markets globally gave back some of the previous day’s rally and a preliminary domestic estimate showed manufacturing sales climbing in April.
Shares slid worldwide as fears about weak earnings and slowing economic growth punctured the recent mini-rally.
Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to prospects for the global economy.
Oil dipped as concerns over a possible recession and China’s COVID-19 curbs balanced tight global supply and an expected pick-up in demand during the U.S. summer driving season.
U.S. crude prices eased 0.1% to $110.19 a barrel, while the Canadian dollar was trading 0.2% lower at 1.2790 to the greenback, or 78.19 U.S. cents. It touched its strongest intraday level since May 5 at 1.2762.
Canadian factory sales rose 1.6% in April from March, largely driven by higher sales of petroleum and coal products, Statistics Canada said in a flash estimate.
A separate flash estimate for the same month showed that wholesale trade rose 0.2%.
Canadian government bond yields were higher across a steeper curve as the market reopened following Monday’s holiday for Victoria Day. The 10-year rose 3.8 basis points to 2.870%.
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