US Markets

C$ weakens as investors weigh rising U.S.-China tensions

Credit: REUTERS/Mark Blinch

The commodity-linked Canadian dollar weakened against its U.S. counterpart on Tuesday as investors weighed rising coronavirus cases and increased tensions between the United States and China.

* Canadian dollar falls 0.2% against the greenback

* Price of U.S. oil declines 1.6%

* Loonie trades in a range of 1.3360 to 1.3420

* Canadian bond yields trade mixed across a flatter curve

TORONTO, Aug 4 (Reuters) - The commodity-linked Canadian dollar weakened against its U.S. counterpart on Tuesday as investors weighed rising coronavirus cases and increased tensions between the United States and China.

U.S. stock index futures fell after U.S. President Donald Trump's moves to force China-owned TikTok into a sale of its U.S. operations drew a sharp rebuke from Beijing.

Canada runs a current account deficit and is a major producer of commodities, including oil, so the loonie tends to be sensitive to the global flow of trade and capital.

U.S. crude prices were down 1.6% at $40.35 a barrel amid concerns that a fresh wave of COVID-19 infections will see a global demand recovery stalling due to tighter lockdowns, just as major producers ramp up output.

The Canadian dollar was trading 0.2% lower at 1.3418 to the greenback, or 74.53 U.S. cents. The currency traded in a range of 1.3360 to 1.3420.

In July, the loonie strengthened for the fourth straight month as the U.S. dollar broadly declined and as evidence emerged of global and domestic economic recovery from the coronavirus crisis. Canada's jobs report for July is due on Friday.

Speculators have cut bearish bets on the loonie to the lowest since mid-March, data from the U.S. Commodity Futures Trading Commission showed on Friday.

Canadian government bond yields were mixed across a flatter curve, with the 10-year down 2.9 basis points at 0.439%. On Friday, it touched its lowest intraday level since March 9 at 0.412%. (Reporting by Fergal Smith Editing by Nick Zieminski) ((fergal.smith@thomsonreuters.com; +1 416 941 8113;)) Keywords: CANADA FOREX/

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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