Canadian dollar extends breach of key psychological level
Canadian dollar weakens 0.3% against the greenback
Touches its weakest since May 2020 at 1.4039
Price of U.S. oil increases 0.5%
Bond yields ease across a flatter curve
By Fergal Smith
TORONTO, Nov 14 (Reuters) -The Canadian dollar weakened further beyond a key psychological level against its U.S. counterpart on Thursday, pressured by broad-based gains for the American currency and the potential for U.S. trade tariffs to hurt the domestic economy.
The loonie CAD= was trading 0.3% lower at 1.4035 to the U.S. dollar, or 71.25 U.S. cents, its fifth straight day of declines.
The currency touched its weakest intraday level since May 2020 at 1.4039, after briefly moving past the 1.40 level on Wednesday.
"Currency forecasters have turned overwhelmingly bearish on the currency in recent months, with domestic weakness seen intersecting with U.S. outperformance and a constant drumbeat of trade threats to drive the exchange rate lower," Karl Schamotta, chief market strategist at Corpay, said in a note.
The U.S. dollar continued its relentless march higher against a basket of major currencies as investors bet that higher trade tariffs and tighter immigration under the incoming Trump administration would fuel inflation, potentially slowing the Federal Reserve's interest rate cutting cycle.
Psychological levels such as the round number of 1.40 tend to be significant for market participants.
"We expect further (Canadian dollar) weakness, with technical indicators opening up an air pocket between 1.40 and 1.43, but remain wary of an overshoot," Schamotta said.
Canada sends about 75% of its exports to the United States, including oil, which could escape protectionist trade measures, according to participants in Canada's energy industry.
U.S. crude futures CLc1 settled 0.4% higher at $68.70 a barrel, clawing back some recent declines for a third straight day.
Canadian bond yields moved lower across a flatter curve. The 10-year CA10YT=RR was down 5.7 basis points at 3.260%.
Reporting by Fergal Smith; Editing by Sandra Maler
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
