Canadian dollar slips to three-month low

·2 min read
FILE PHOTO: A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto

By Saqib Iqbal Ahmed

(Reuters) - The Canadian dollar fell to near a three-month low against its U.S. counterpart on Thursday, hurt by dismal economic data and weakness in oil prices.

The loonie found little support from Bank of Canada Governor Tiff Macklem's comments in a media interview that the central bank will tackle inflation to get it back on target if temporary price pressures become persistent, but that it was not automatic that it would raise interest rates.

At 3:40 p.m. EDT (1940 GMT), the Canadian dollar was trading 0.8% lower at 1.2604 to the greenback, or 79.34 U.S. cents, its lowest level since April 21.

Canada's scorching hot housing market is starting to cool, as buyers shift their focus from getting more space to getting back to normal after the COVID-19 pandemic, and the fear of missing out in the market fades into a prevailing sense of "wait and see."

Separately, Canada lost 294,200 jobs in June, mainly on a plunge in service-sector jobs in industries hit hard by COVID-19 restrictions, a report from payroll services provider ADP showed on Thursday.

The Canadian dollar was also hurt by weakness in the price of oil, one of Canada's major exports. Oil fell 1% on expectations of more supply after a compromise agreement between leading OPEC producers and following a surprisingly poor weekly reading on U.S. fuel demand.

The Canadian currency fell a day after the Bank of Canada's said it was cutting the scope of its bond-buying program but holding its key interest rate at a record low.

"A case of sell the rumor, buy the news was apparent following the BoC announcement on Wednesday," Ronald Simpson, managing director of global currency analysis at Action Economics, said in a note.

Canadian bond yields fell across the yield curve, with the 10-year down about 3 basis points at 1.262%.

(Reporting by Saqib Iqbal Ahmed; Editing by Paul Simao)

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