US Markets

C$ dips amid Brexit uncertainty, U.S. recession fears

Credit: REUTERS/MARK BLINCH

The Canadian dollar edged lower against its U.S. counterpart on Wednesday, extending its pullback from a near two-week high the previous day, as the greenback broadly rose and investors worried about the global economic outlook.

(Corrects 7th paragraph to reflect upcoming GDP data will be for second quarter not third quarter)

* Canadian dollar falls 0.1% against the greenback

* Price of U.S. oil increases 2.6%

* Canadian bond prices rise across the yield curve

TORONTO, Aug 28 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Wednesday, extending its pullback from a near two-week high the previous day, as the greenback broadly rose and investors worried about the global economic outlook.

The U.S. dollar rose against a basket of currencies as British Prime Minister Boris Johnson's move to limit parliament's opportunity to derail his Brexit plans weighed on sterling.

U.S. stocks declined after moves in the U.S. bond market brought back fears of a recession as the trade war between the United States and China drags on.

Canada exports many commodities, including oil, so its economy could be hurt by a slowdown in the global economy.

U.S. crude prices were up 2.6% at $56.34 a barrel after industry data showing a fall in stockpiles of U.S. crude somewhat eased worries about subdued demand due to the U.S.-China trade war.

At 9:39 a.m. (1339 GMT), the Canadian dollar was trading 0.1% lower at 1.3302 to the greenback, or 75.18 U.S. cents. The currency, which notched on Tuesday its strongest intraday level since Aug. 14 at 1.3225, traded in a range of 1.3282 to 1.3319.

The decline for the loonie came ahead of the release on Friday of Canada's second-quarter gross domestic product data, which could help guide expectations for next week's Bank of Canada interest rate decision.

Money markets expect the central bank to ease rates by the end of the year.

Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year rose 3.5 Canadian cents to yield 1.32% and the 10-year was up 11 Canadian cents to yield 1.113%. (Reporting by Fergal Smith; Editing by David Gregorio) ((fergal.smith@thomsonreuters.com; +1 416 941 8113;)) Keywords: CANADA FOREX/ (CORRECTED)

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