Canadian dollar falls 0.4% against the greenback
Touches its weakest since August 22 at 1.3896
Advance estimate shows factory sales down 1.5% in August
Bond yields rise across the curve
TORONTO, Sept 24 (Reuters) – The Canadian dollar weakened to a one-month low against its U.S. counterpart on Wednesday as broad-based gains for the greenback offset higher oil prices.
The loonie was trading 0.4% lower at 1.3885 per U.S. dollar, or 72.02 U.S. cents, after touching its weakest intraday level since August 22 at 1.3896.
“USD-CAD is tracking the broader recovery that we have seen in the USD in the past week,” said George Davis, chief technical strategist at RBC Capital Markets.
“With the USD poised to register bullish short-term breakouts against EUR and GBP today, USD-CAD has pierced a resistance level at 1.3874, which has added to upward momentum in the pair as it moves to a one-month high.”
The U.S. dollar gained against a basket of major currencies, supported by Federal Reserve Chair Jerome Powell’s cautious tone on further easing.
The price of oil was up 1.9% as U.S. crude inventory data added to a sense in the market of tightening supplies. Oil is one of Canada’s major exports.
Canadian factory sales fell 1.5% in August from July, largely driven by lower sales in the transportation equipment as well as the food product subsectors, preliminary data showed.
July GDP data, due on Friday, could offer additional clues on the state of the domestic economy which has been buffeted by trade uncertainty. Economists expect a gain of 0.1%.
Canadian Prime Minister Mark Carney said on Tuesday that trade negotiations with the U.S. were ongoing, and a lot of the remaining issues would move to a forthcoming review of the United States-Mexico-Canada trade agreement (USMCA).
Canadian bond yields moved higher across the curve, tracking moves in U.S. Treasuries. The 10-year was up 1.6 basis points at 3.202%. (Reporting by Fergal Smith, editing by Ed Osmond)
