Loonie slips as investors struggle to calibrate economic downturn

Reported By: Fergal Smith, Reuters

TORONTO (Reuters) – The Canadian dollar weakened against the greenback on Tuesday but stuck to its recent trading range as investors awaited more details on the economic impact of the coronavirus crisis.

The Canadian dollar was trading 0.3% lower at 1.4039 to the greenback, or 71.23 U.S. cents. Together with losses on Monday, the loonie has given back all of last week’s 1% advance.

The loonie is trading “with little directionality” for now, said Bipan Rai, North America head, FX strategy at CIBC Capital Markets. “That should change once we get a better feel for how Q2 (second quarter) data is shaping up.”

“We’re still expecting price action to remain contained within the 1.38-1.43 range,” Rai said.

A collapse this year in oil prices has worsened the impact of the coronavirus crisis on Canada’s commodity-linked economy, with the central bank projecting a contraction in output by as much as 30% in the second quarter from its level at the end of 2019.

Newly appointed Bank of Canada Governor Tiff Macklem projected a halting economic recovery during an exclusive interview conducted before he was named, suggesting he will continue the central bank’s loose monetary policy approach.

The decline for the loonie came as leading U.S. infectious disease expert Anthony Fauci warned Congress that a premature opening of the nation’s economy could lead to additional outbreaks of the novel coronavirus, pressuring shares on Wall Street.

Canada runs a current account deficit and is a major exporter of commodities, including oil, so the loonie tends to be particularly sensitive to the global flow of trade and capital.

U.S. crude oil futures were up 7.2% at $25.88 a barrel, boosted by an unexpected commitment from Saudi Arabia to deepen production cuts in June to help drain a supply glut built up during the crisis.

The Canadian coronavirus death toll passed the 5,000 mark and Prime Minister Justin Trudeau said major reforms were needed to seniors’ residences, where more than 80% of the victims lived. Ottawa is rolling out about C$300 billion in fiscal measures to support Canada’s economy.

Canadian government bond yields were mixed across a flatter curve, with the 10-year down 2.8 basis points at 0.563%.

(Reporting by Fergal Smith; Editing by Grant McCool and Andrea Ricci)

Feature Image Credits: 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

This content is also available in: English

Discover

Bài Liên Quan

Nike tung bộ sưu tập mới cho Tết Canh Tý 2020

Với chủ đề con chuột – con vật đứng đầu trong 12 con giáp, các hãng đồ thể thao bắt đầu...

Rộn Ràng Giáng Sinh Việt

Giáng sinh là ngày lễ lớn của văn hóa phương tây và du nhập vào Việt Nam cùng với Kito giáo. Tại...

Canada ký thỏa thuận mua 7,9 triệu bộ xét nghiệm coronavirus nhanh, đang chờ phê duyệt

Canada đã ký một thỏa thuận mua tới 7,9 triệu bộ xét nghiệm chăm sóc nhanh chóng coronavirus, đang chờ các quan...

Theo Các Chuyên Gia: Giảm Kháng Thể Là Điều Bình Thường, Không Có Khả Năng Tái Nhiễm COVID-19

Tái nhiễm COVID-19, nỗi lo giảm kháng thể từ lâu đã là đề tài được quan tâm trong khi chúng ta chưa...

Bộ Y tế Canada chờ thêm dữ liệu trước khi đưa ra quyết định về vắc xin AstraZeneca

Bộ Y tế Canada cho biết họ vẫn cần thêm thông tin trước khi có thể đưa ra quyết định về vắc...

Health Minister announces mandatory self-isolation for Canadian Travellers returning home

As of early Wednesday morning, Canadian Health Minister Patty Hajdu told the Senate in Ottawa that all travellers, with an exception of...

Chương trình hỗ trợ tiền thuê chỗ doanh nghiệp mới sẽ chưa sẵn sàng cho đến tháng tới

Chương trình cải tiến sẽ có hiệu lực từ tháng 10 nhưng hiện cần phải qua lập pháp để trở thành hiện...

This content is also available in: English