Market News

CANADA FX DEBT-C$ hits 2-year low as c.bank tightening weighs on global sentiment - REUTERS

SEPTEMBER 23, 2022

 (Updates prices)

      Canadian dollar weakens 0.2% against the greenback

        * Touches its weakest since July 2020 at 1.3544

        *  Price of U.S. oil settles 0.7% higher

        *  Canadian bond yields rise across steeper curve

    By Fergal Smith
       TORONTO, Sept 22 (Reuters) - The Canadian dollar
weakened to its lowest level in more than two years against its
U.S. counterpart on Thursday as a wave of central bank interest
rate hikes added to concern about the global economic outlook.
    Benchmark U.S. Treasury yields climbed to an 11-year high
and Wall Street fell as central banks, including the Bank of
England, continued raising interest rates in a fight against
inflation that could trigger a recession.             
    It follows the Federal Reserve's move on Wednesday to hike
by three-quarters of a percentage point and signal further large
increases to come.
    Canada is a major producer of commodities, including oil, so
the loonie tends to be sensitive to shifts in investor
    "Equity market trends remain the most important determinant
of the CAD's performance in the short run," Shaun Osborne, chief
currency strategist at Scotiabank, said in a note.
    The Canadian dollar        was trading 0.2% lower at 1.3490
to the greenback, or 74.13 U.S. cents, after touching its
weakest intraday level since July 2020 at 1.3544.
    U.S. crude oil futures        settled 0.7% higher at $83.49
a barrel in volatile trading focused on Russian supply concerns.
    Canada's retail sales data for July, due on Friday, could
help guide expectations for further tightening from the Bank of
    Canadian government bond yields were higher across a steeper
curve, tracking the move in U.S. Treasuries.
    The 10-year             rose 7.7 basis points to 3.119% but
fell 10.5 basis points further below the equivalent U.S. rate to
a gap of 57.5 basis points.
 (Reporting by Fergal Smith; editing by Jonathan Oatis)


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