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CANADA FX DEBT-Canadian dollar slides by most in 7 weeks as virus fears grow

Credit: REUTERS/Mark Blinch

The Canadian dollar weakened to a three-week low against its U.S. counterpart on Wednesday, as investors worried that rising coronavirus cases would slow global economic recovery and ahead of an interest rate decision by the Bank of Canada.

* Canadian dollar declines 0.8% against the greenback

* Loonie hits a 3-week low at 1.3295

* Price of U.S. oil falls 5.2%

* Canadian bond yields ease across a flatter curve

TORONTO, Oct 28 (Reuters) - The Canadian dollar weakened to a three-week low against its U.S. counterpart on Wednesday, as investors worried that rising coronavirus cases would slow global economic recovery and ahead of an interest rate decision by the Bank of Canada.

Shares around the world tumbled as coronavirus infections grew rapidly in Europe and the United States, igniting fears of possible strict lockdown measures that could damage already fragile economic recoveries.

Canada is a major export of commodities, including oil, so the loonie tends to be sensitive to prospects for global growth.

U.S. crude prices were down 5.2% at $37.50 a barrel as a surge in U.S. crude stocks and rising coronavirus infections fanned fears of a supply glut and weaker fuel demand.

The Canadian dollar was trading 0.8% lower at 1.3287 to the greenback, or 75.26 U.S. cents, its biggest decline since Sept. 8. The currency touched its weakest intraday level since Oct. 7 at 1.3295.

Canada's central bank is due to make an interest rate decision and update its economic outlook at 10 a.m. (1400 GMT). The central bank has said it will leave rates at a record low of 0.25% until its 2% inflation target is achieved sustainably, which it does not expect for at least two years.

Canadian government bond yields were lower across a flatter curve, with the 10-year down 1.5 basis points at 0.582%. (Reporting by Fergal Smith; editing by Jonathan Oatis) ((fergal.smith@thomsonreuters.com; +1 647 480 7446;)) 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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