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Canadian dollar weakens 1% against the U.S. dollar
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Touches its weakest since Nov. 3 at 1.3762
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Price of U.S. oil settles 3.6% lower
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2-year yield rises 7.1 basis points
TORONTO, March 7 (Reuters) - The Canadian dollar weakened to a four-month low against its U.S. counterpart on Tuesday as a hawkish shift by Federal Reserve Chair Jerome Powell rattled Wall Street and ahead of a Bank of Canada interest rate decision this week.
The loonie was trading 1% lower at 1.3750 to the U.S. currency, or 72.73 U.S. cents, its biggest decline since Sept. 30. The currency touched its weakest level since Nov. 3 at 1.3762.
"It was basically a broad-based USD rally that drove the CAD weakness today," said George Davis, chief technical strategist at RBC Capital Markets. "The move above 1.3705 took out a double top from last December and provided additional momentum."
A double top is a technical chart pattern indicating the reversal of a previous trend.
The U.S. dollar rallied against a basket of major currencies, while U.S. stock indexes and the price of oil , one of Canada's major exports, fell as Powell said the Fed will likely need to raise interest rates more than expected as it seeks to rein in inflation.
U.S. crude oil futures settled 3.6% lower at $77.58 a barrel.
The Bank of Canada is due to make a policy decision on Wednesday.
The central bank will keep its key interest rate on hold at 4.50% for the rest of this year, according to economists polled by Reuters, who said the bank was more likely to sound a hawkish tone than dovish as inflation remains a worry.
Canadian government bond yields were mixed across a flatter curve, tracking the move in U.S. Treasuries. The 2-year rose 7.1 basis points to 4.330%, while the 10-year was down 2.5 basis points at 3.336%. (Reporting by Fergal Smith; Editing by Jane Merriman and Will Dunham)
