As global growth concerns mount, the Canadian dollar falls to a five-month low.

as-global-growth-concerns-mount,-the-canadian-dollar-falls-to-a-five-month-low.

As global growth concerns mount, the Canadian dollar falls to a five-month low.

On Monday, the Canadian dollar fell to its lowest level in nearly five months against the US dollar, as investors became more concerned about the global economic outlook after China’s two largest cities tightened COVID-19 curbs.

Global stock markets extended recent losses, while the safe-haven US dollar soared to a new two-decade high as Shanghai and Beijing tightened restrictions, with investors also concerned about the impact of higher interest rates as central banks combat inflation.

Canada is a major producer of commodities, including oil, so the loonie tends to be particularly sensitive to the global economic outlook.

U.S. crude prices were down nearly 3% at $106.5 a barrel, while the Canadian dollar was trading 0.3% lower at 1.2940 to the greenback, or 77.28 U.S. cents. It touched its weakest level since Dec. 20 at 1.2953.

The decline for the loonie came after data on Friday showed that the Canadian economy added far fewer jobs than expected.

Speculators have slashed their bullish bets on the currency, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of May 3, net long positions had fallen to 9,029 contracts from 20,881 in the prior week.

Bank of Canada Deputy Governor Toni Gravelle is due to speak on Thursday on the topic of commodities, growth and inflation, which could offer clues on the outlook for interest rates. Money markets expect the central bank to raise its benchmark rate by half a percentage point for a second straight policy meeting on June 1.

Canadian government bond yields were lower across the curve. The 10-year eased 3.1 basis points to 3.094%, after earlier touching its highest since May 2011 at 3.173%.

U.S. wholesale inventories unrevised in March

U.S. wholesale inventories increased solidly in March, though the pace slowed from the prior month amid rising sales, government data showed on Monday.

The Commerce Department said wholesale inventories rose 2.3% in March as reported last month. Stocks at wholesalers climbed 2.8% in February. Economists polled by Reuters had expected inventories would be unrevised.

Wholesale inventories advanced 22.0% in March on a year-on-year basis. Inventories are a key part of gross domestic product. Wholesale motor vehicle inventories accelerated 2.4% after rebounding 1.9% in February.

Wholesale inventories, excluding autos, rose 2.3% in March. This component goes into the calculation of GDP.

Source: XglobalMarkets

Related Posts