C$ holds near seven-week low as China virus threatens economic growth
TORONTO (Reuters) - The Canadian dollar was little changed against the greenback on Tuesday, holding close to its weakest level in nearly seven weeks as investors worried that China's spreading coronavirus would drag on global economic activity.
Canada is a major exporter of commodities, including oil, so its economy could be hurt by a slowdown in the global economy.
U.S. crude oil futures <CLc1> were down 0.3% at $52.99 a barrel amid fears that the coronavirus, which has claimed over 100 lives in China, might weigh on oil demand.
At 9:44 a.m. (1444 GMT), the Canadian dollar <CAD=D4> was trading nearly unchanged at 1.3189 to the greenback, or 75.82 U.S. cents. The currency touched its weakest intraday level since Dec. 11 at 1.3206.
On Monday, Canada's minority Liberal government kicked off the ratification process for the United States-Mexico-Canada Agreement (USMCA) trade pact and urged opposition lawmakers to formally approve the deal as quickly as possible. Canada sends about 75% of its exports to the United States.
Canada's gross domestic product data for November is due on Friday, which could help guide expectations for a Bank of Canada interest rate cut.
Last week, the central bank left its benchmark interest rate steady at 1.75%, as expected, but said a future cut was possible should a recent slowdown in domestic growth persist.
Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The two-year <CA2YT=RR> fell 2.9 Canadian cents to yield 1.458% and the 10-year <CA10YT=RR> was down 8.8 Canadian cents to yield 1.314%.
The 10-year yield touched its lowest intraday level since Oct. 8 at 1.283%.
(Reporting by Fergal Smith; editing by Jonathan Oatis)
