Canadian dollar drops for fourth day as stocks slide


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TORONTO — The Canadian dollar weakened to

its lowest level in more than five weeks against its U.S.

counterpart on Monday, as investors worried about the global

economic outlook and awaited an influential central bank

conference this week.

The Canadian dollar was trading 0.4% lower at 1.3050

to the U.S. dollar, or 76.63 U.S. cents, its fourth straight day

of declines. The currency touched its weakest level since July

15 at 1.3061.

“Weaker stocks and softer oil prices remain headwinds for

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the CAD, and while the BoC (Bank of Canada) policy backdrop

remains supportive in broad terms, we feel, there is little

opportunity for the CAD to differentiate itself from the USD

ahead of the key Jackson Hole event,” strategists at Scotiabank,

including Shaun Osborne, said in a note.

Equity markets globally fell and the U.S. dollar

rose against a basket of major currencies as fears mounted that

inflation-busting interest rate hikes in the United States and

Europe will weaken the global economy.

Federal Reserve Chair Jerome Powell is due to speak at the

Jackson Hole symposium in Wyoming on Friday, with expectations

growing of further rate hikes rather than a pivot to a more

dovish policy.

Canada is a major producer of commodities, including oil, so

its currency tends to be sensitive to shifts in risk appetite.

U.S. crude oil futures settled 0.6% lower at $90.23 a

barrel.

In economic news, Canadian new home prices increased 0.1% in

July from June, data from Statistics Canada showed. It was the

smallest increase since June 2020.

Canadian government bond yields were higher across the

curve, tracking the move in U.S. Treasuries. The 10-year

rose 7.4 basis points to 3.022%, its highest since

July 21.

(Reporting by Fergal Smith; Editing by Paul Simao and Tomasz

Janowski)



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