- March 30, 2021
- Posted by: Trading
- Category: News
By Fergal Smith
TORONTO (Reuters) – The Canadian dollar edged lower against its broadly stronger U.S. counterpart on Monday as the default of a U.S. hedge fund weighed on investor sentiment, offsetting higher oil prices.
The was trading 0.1% lower at 1.2585 to the greenback, or 79.46 U.S. cents, having traded in a range of 1.2571 to 1.2626. Last Thursday, it touched a two-week low at 1.2628.
There was “a little bit of movement towards a stronger U.S. dollar, largely driven by some of this contagion risk in equity markets,” said Rahim Madhavji, president at KnightsbridgeFX.com.
U.S. bank shares fell amid warnings of potential losses from the hedge fund’s default on margin calls, while the safe-haven U.S. dollar notched a four-month high against a basket of major currencies.
Still, the loonie has been the top performing G10 currency since the start of the year, with a gain of 1.2%.
Domestic economic stimulus and higher commodity prices are among the longer-term themes supportive of the loonie, Madhavji said.
prices settled nearly 1% higher at $61.56 a barrel after Reuters reported that Russia would support stable oil output from OPEC+ ahead of a meeting with the producer group later this week. Oil is one of Canada’s major exports.
Canadian consumer confidence rose in March by the most since last June, data from the Conference Board of Canada, a research organization, showed.
Canada’s GDP data for January, due on Wednesday, could guide expectations on the Bank of Canada policy outlook. Strategists say the central bank could reduce its bond purchases in April.
Canadian government bond yields rose across much of a steeper curve in tandem with U.S. Treasuries. The 10-year climbed 3.8 basis points to 1.539%, but holding well below the 14-month high notched earlier this month at 1.677%.
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