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C$ hits weakest level since June 2020 as currency volatility jumps

09/26/2022 | 10:59am EST
FILE PHOTO: A Canadian dollar coin, commonly known as the

TORONTO (Reuters) - The Canadian dollar weakened to its lowest level in more than two years against its broadly stronger U.S. counterpart on Monday, as bond yields and volatility in global currency markets climbed and speculators grew less bullish on Canada's currency.

The FX volatility index jumped to its highest level since March 2020, as sterling crashed to a record low on worries about Britain's finances after the government of new Prime Minister Liz Truss released its economic plan and the U.S. dollar added to recent gains against a basket of major currencies.

Speculators have cut their bullish bets on the Canadian dollar to the lowest level since early June, data from the U.S. Commodity Futures Trading Commission showed on Friday.

As of Sept. 20, net long positions had fallen to 2,056 contracts from 12,425 in the prior week.

The Canadian dollar was trading 0.4% lower at 1.3650 to the greenback, or 73.26 U.S. cents, after touching its weakest level since June 2020 at 1.3695.

The price of oil, one of Canada's major exports, clawed back some recent losses as market participants awaited for details on new sanctions on Russia. U.S. crude prices were up 1.7% to $80.04 a barrel.

In domestic data, wholesale trade rose 0.8% in August from July, largely driven by higher sales in the food, beverage and tobacco subsector, a preliminary estimate from Statistics Canada showed.

Meanwhile, more than a third of customers in the Canadian province of Nova Scotia were without power on Monday, two days after powerful storm Fiona battered the east coast of the country.

Canadian government bond yields were higher across a steeper curve, tracking the move in U.S. Treasuries.

The 10-year rose 6.6 basis points to 3.136% but was trading 1.3 basis points further below the equivalent U.S. rate at a gap of 64 basis points.

(Reporting by Fergal Smith; Editing by Paul Simao)


ę Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / CANADIAN DOLLAR (AUD/CAD) -0.32% 0.91323 Delayed Quote.-0.29%
BRENT OIL 1.59% 88.19 Delayed Quote.10.28%
BRITISH POUND / CANADIAN DOLLAR (GBP/CAD) -0.27% 1.64894 Delayed Quote.-3.18%
CANADIAN DOLLAR / JAPANESE YEN (CAD/JPY) 0.88% 100.867 Delayed Quote.9.48%
CANADIAN DOLLAR / SWISS FRANC (CAD/CHF) 0.01% 0.69719 Delayed Quote.-3.69%
EURO / CANADIAN DOLLAR (EUR/CAD) 0.07% 1.41889 Delayed Quote.-1.17%
NEW ZEALAND DOLLAR / CANADIAN DOLLAR (NZD/CAD) -0.10% 0.8601 Delayed Quote.-0.06%
US DOLLAR / CANADIAN DOLLAR (USD/CAD) -0.37% 1.33979 Delayed Quote.6.58%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) -0.08% 61.45 Delayed Quote.-16.50%
WTI 1.73% 82.499 Delayed Quote.6.45%
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