The Canadian dollar CADUSD weakened to its lowest in 19 months against its U.S. counterpart on Friday as oil prices tumbled and the greenback broadly rallied.
The loonie was trading 0.5% lower at 1.3020 to the greenback, or 76.80 U.S. cents, after touching its weakest since November 2020 at 1.3078.
For the week, the currency was down 1.8%, its biggest weekly decline since August last year, as investors worried that aggressive tightening by central banks, including Wednesday’s 0.75 percentage point rate hike by the U.S. Federal Reserve, could derail economic growth.
“On top of those interest rate concerns, we saw oil take a tumble,” said Darren Richardson, chief operating officer at Richardson International Currency Exchange Inc. “That added fuel to the loonie weakness today.”
The price of oil, one of Canada’s major exports, tumbled to a four-week low on worries that an economic slowdown could cut demand for energy.
U.S. crude oil futures settled 6.8% lower at $109.56 a barrel, while the U.S. dollar jumped against a basket of major currencies as the Bank of Japan’s decision to buck the recent wave of tightening weighed on the Japanese yen .
In domestic data, the pace of Canadian home price growth slowed in May, edging off April’s record high, but prices still rose both on the month and on the year, the National Bank Composite House Price Index showed.
Canadian government bond yields were higher across the curve, with the 10-year up 3.9 basis points at 3.414%. On Thursday, it touched its highest intraday level in 12 years at 3.664%.
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