Canadian dollar lags G10 peers as greenback slides By Reuters
Forex 4 hours ago (Dec 01, 2022 11:22AM ET)
(C) Reuters. FILE PHOTO: A Canadian dollar coin, commonly known as the “Loonie”, is pictured in this illustration picture taken in Toronto, January 23, 2015. REUTERS/Mark Blinch (CANADA – Tags: BUSINESS)/File Photo
TORONTO (Reuters) – The Canadian dollar fell against its broadly weaker U.S. counterpart on Thursday, as investors scaled back Bank of Canada interest rate hike bets and domestic data showed factory activity slowing for a fourth straight month.
The loonie was trading 0.3% lower at 1.3445 to the greenback, or 74.38 U.S. cents. It was giving back some of its sharp gains from the previous day when Federal Reserve Chair Jerome Powell said that U.S. rate hikes could slow in December.
Still, it was the only G10 currency to lose ground against the U.S. dollar. The greenback was down 1% against a basket of major currencies.
The Bank of Canada has also been raising rates. Chances that it would hike by 50 basis points rather than 25 basis points at a policy decision next Wednesday have been cut to roughly 10% from 30% since Powell’s comments, money market data shows.
A slim majority of economists in a Reuters poll expect the larger move but that the BoC would then pause its tightening campaign.
The S&P Global (NYSE:SPGI) Canada Manufacturing Purchasing Managers’ Index (PMI) rose to a seasonally adjusted 49.6 in November from 48.8 in October.
A reading of less than 50 shows contraction in the sector. The PMI has been below that level each month since August.
Canada’s jobs report for November, due on Friday, could offer further clues on the strength of the domestic economy.
U.S. crude oil was up 2.9% at $82.91 a barrel on the chance of further supply cuts by OPEC+ and after China announced an easing of COVID curbs.
Canadian government bond yields were lower across the curve, tracking the move in U.S. Treasuries.
The 10-year touched its lowest level since Aug. 18 at 2.860% before rebounding slightly to 2.876%, down 5.9 basis points on the day.
Canadian dollar lags G10 peers as greenback slides
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