Credit: REUTERS/Mark Blinch(Adds strategist quotes and details throughout, updates prices)
* Canadian dollar falls 0.5% against the greenback
* Loonie touches its strongest intraday level since July 9
* Price of U.S. oil settles 1.1% lower
* Canada's 10-year yield eases 3.4 basis points to 0.504%
By Fergal Smith
TORONTO, July 16 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Thursday as investors worried that rising coronavirus cases in the United States could slow economic recovery, with the loonie pulling back from an earlier one-week high.
The S&P 500 slipped from a five-week high after a jump in coronavirus caseloads that has forced California and other states to shut down again.
"It still remains a story of equities and risk sentiment" for the Canadian dollar, said Christian Lawrence, a senior market strategist at Rabobank.
Canada runs a current account deficit and is a major exporter of commodities, including oil, so the loonie tends to be sensitive to the global flow of trade and capital.
U.S. crude futures
The Canadian dollar
Canada's historic budget deficit for this year, projected just over a week ago to top C$340 billion, may be even higher if the more pessimistic Bank of Canada growth forecast delivered on Wednesday turns out to be right, analysts said.
The central bank said that Canada's economic activity would not return to pre-pandemic levels until 2022 and signaled its benchmark interest rate could stay at 0.25% until 2023.
Bank of Canada Governor Tiff Macklem "gave the clearest guidance we've heard in years and the Bank's central scenario was relatively cautious," Lawrence said.
Canada added more than 1 million jobs in June after shedding nearly 3 million in May, a report from payroll services provider ADP showed.
Canadian government bond yields were lower across a flatter
curve, with the 10-year
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
