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Views Article – Sharenet Wealth

Forex, News

C$ hits 1-week low as investors fret about global growth outlook

* Canadian dollar falls 0.6% against the greenback * U.S. oil prices decrease by 3.6% * Bond prices move higher across a flatter yield curve * Canada’s curve inverts by the most in nearly two decades TORONTO, Aug 14 (Reuters) – The Canadian dollar weakened to a one-week low against its U.S. counterpart on Wednesday as oil prices dropped and investors worried about the global growth outlook. At 9:51 a.m. (1351 GMT), the Canadian dollar was trading 0.6% lower at 1.3304 to the greenback, or 75.17 U.S. cents. The currency touched its weakest intraday level since last Wednesday at 1.3316. U.S. stocks fell as a closely watched bond market indicator pointed to a renewed risk of recession, undoing gains from the previous session due to a retreat by Washington on its latest tariffs on Chinese goods. Canada exports many commodities, including oil, so its economy could be hurt by a slowdown in the global economy. Oil prices fell on weak economic data from China and Europe and a rise in U.S. crude inventories. U.S. crude prices were down 3.56% at $55.03 a barrel. China reported weaker-than-expected economic data for July, including a surprise drop in industrial output growth to a more than 17-year low, while a slump in exports sent Germany’s economy into reverse in the second quarter. Canadian government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries. The two-year rose 9.5 Canadian cents to yield 1.334% and the 10-year climbed 84 Canadian cents to yield 1.156%. The 10-year yield fell 3.8 basis points further below the 2-year yield to a spread of -17.8 basis points, the curve’s largest inversion since June 2000. An inverted curve is seen by some investors as a harbinger of recession. (Reporting by Levent Uslu; editing by Jonathan Oatis)


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