(Updates prices and adds quotations and details from strategists throughout.)
* The Canadian currency loses 0.1 percent against the US dollar.
* At 1.2519, it reaches its lowest level since April 22.
* The price of oil in the United States has dropped by 1.6 percent.
* Canada’s 10-year yield falls to 1.276 percent, a four-and-a-half-month low.
Fergal Smith contributed to this article.
(Reuters) – TORONTO, July 7 (Reuters) – The Canadian dollar declined for a third day versus the US dollar on Wednesday, as oil prices fell and investors analyzed the minutes of the Federal Reserve’s most recent policy meeting.
After striking its worst intraday level since April 22 at 1.2519, the loonie was trading 0.1 percent down at 1.2477 to the greenback, or 80.15 US cents.
“Various participants” at the June 15-16 meeting felt requirements for decreasing the central bank’s asset purchases would be “met somewhat earlier than they had anticipated,” according to minutes that revealed a divided Fed grappling with the arrival of inflation and financial stability worries.
Investors have been wary of riskier assets, such as commodity-linked currencies like the Canadian dollar, since the US central bank switched to more hawkish guidelines last month.
“Right now, there’s a lot of noise in the market,” Mazen Issa, senior FX strategist at TD Securities, said. “It just appears to have resonated a little bit more with the Canadian dollar, which has done well overall this year.”
Since the beginning of the year, the loonie has gained 2%, the best performance among G10 currencies. However, it has retreated from a six-year peak near 1.20 last month.
Oil, one of Canada’s main exports, fell 1.6 percent to $72.20 a barrel on Friday, as investors worried that the breakdown in OPEC+ discussions earlier this week meant more supply, not less, was on the way.
The Ivey Purchasing Managers Index (PMI) statistics showed that Canadian economic activity accelerated in June as indicators of employment and prices increased.
On Friday, the Canadian jobs report for June will be released, which may provide insight into what to expect from the Bank of Canada’s policy statement next week.
The 10-year bond in Canada fell to 1.276 percent, its lowest level since February 24, before recovering to 1.297 percent, down 2 basis points on the day.
(Fergal Smith contributed reporting, and Jonathan Oatis edited the piece.)/n
