- Canadian dollar strengthens 0.1% against the greenback
- For the month, the loonie loses 2.4%
- Price of U.S. oil settles 2.5% higher
- Canadian bond yields trade mixed across the curve
The Canadian dollar edged higher against its U.S. counterpart on Thursday but the currency was still down sharply in August as a slowdown in China’s economy pressured commodity-linked currencies.
The loonie was trading 0.1% higher at 1.3515 to the greenback, or 73.99 U.S. cents, after moving in a range of 1.3505 to 1.3557. For the month, the currency lost 2.4%, its biggest monthly decline since February.
“The laggards (in August) among G10 currencies are predominantly the commodity complex,” said Michael Goshko, senior market analyst at Convera Canada. “A lot of that has to do with the ongoing issues with China and what that means for global growth and commodities demand.”
Other commodity-linked currencies include the Norwegian crown , as well as the Australian and New Zealand dollars
China’s manufacturing activity contracted for a fifth straight month in August, an official factory survey showed, fuelling concerns about weakness in the world’s second-biggest economy.
Still, the price of oil settled on Thursday 2.5% higher at $83.63 a barrel. Oil is one of Canada’s major exports.
Canada’s second-quarter GDP report, due on Friday, is likely to show a sharp slowdown in economic growth, a Reuters poll of economists showed, which could lead the Bank of Canada to pause its interest rate hikes despite recent hotter inflation data.
Analysts forecast growth of 1.2%, down from 3.1% in the first three months of the year.
The Canadian central bank is expected to hold its key interest rate steady at 5.00% on Sept. 6 and stay at that level through at least the end of March 2024, according to a majority of economists in a Reuters poll.
Canadian government bond yields were mixed across the curve, with the 10-year down 1 basis point at 3.566%.
REUTERS
