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CANADA FX DEBT-C$ pulls back from 3-1/2-year high as risk appetite fades

05/11/2021 09:40
CANADA FX DEBT-C$ pulls back from 3-1/2-year high as risk appetite fades

Canadian dollar weakens 0.2% against the greenback

Loonie trades in a range of 1.2087 to 1.2125

Price of U.S. oil falls 1.8%

Canadian 10-year yield touches a six-day high at 1.543%

- The Canadian dollar weakened against its U.S. counterpart on Tuesday, pulling back from its highest level in 3-1/2 years as investors turned cautious ahead of data on Wednesday that is expected to show a jump in U.S. inflation.

Global stock markets suffered a second day of sharp losses as a combination of inflation worries, lofty valuations and an anti-monopoly drive in China sent the world's mightiest tech giants tumbling. nL1N2MY0WL

The price of oil, one of Canada's major exports, fell on fading fears of a prolonged outage at the largest U.S. fuel pipeline system, while India's coronavirus crisis and the sell-off in global stock markets also weighed. nL1N2MY089

U.S. crude CLc1 prices fell 1.8% to $63.76 a barrel, while the Canadian dollar CAD= was trading 0.2% lower at 1.2118 to the greenback, or 82.52 U.S. cents.

The currency traded in a range of 1.2087 to 1.2125. On Monday, it touched its strongest level since September 2017 at 1.2074, bolstered by the recent surge in commodity prices and the Bank of Canada's shift last month to a more hawkish stance.

BoC Governor Tiff Macklem is due to speak on Thursday on the benefits of an inclusive economy.

Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries. The 10-year CA10YT=RR rose to its highest level since Wednesday at 1.543% before dipping to 1.530%, up 1.2 basis points on the day.

(Reporting by Fergal Smith; editing by Jonathan Oatis)

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