One loonie buys 74.16 USA cents.
Advertisement
OPEC’s inability to agree on a production ceiling last Friday meant that supply will continue to depress oil prices.
The dollar touched C$1.3623, the strongest level against its Canadian counterpart since mid-2004.
Canadian government bond prices were higher across the maturity curve, with the two-year price up 6.5 Canadian cents to yield 0.566 per cent and the benchmark 10-year rising 20 Canadian cents to yield 1.498 per cent, approaching the near five-week low hit last week at 1.487 per cent. USA crude futures fell to as low as $US37.50 per barrel, also hitting a near-seven-year low.
On the commodity markets, the January crude contract was $37.99 per barrel, up 34 cents. On Monday, oil slid 6% to reach its lowest level since 2009.
S&P 500 lost 0.7 per cent to 2,077.07, led by 3.7 per cent decline in the S&P energy sector energy index.
The dollar soared against oil-linked currencies, touching an 11-year high against the Canadian dollar (CAD=D3) and a 13-year high versus the Norwegian crown (NOK=) on Tuesday, but its performance wasn’t as stellar against other major rivals.
The National Federation of Independent Business said on Tuesday itsSmall Business Optimism Index fell 1.3 points to 94.8 in November.
Advertisment Canada’s main stock index saw its lowest close since October 2013 on Tuesday as the oil price shock weighed on sentiment. The US currency was broadly supported as investors expect the Federal Reserve to raise rates later this month for the first time in almost a decade.
“Beyond the December hike, investors are concerned about the lack of Chinese demand which is acting as a millstone around the neck of risky assets and most investors will stay away until they see a clearer direction on rates”, said Cliff Tan, East Asian head of global markets at Bank of Tokyo-Mitsubishi UFJ in Hong Kong.
Advertisement
The lower dollar may be welcome news for worldwide travellers visiting Canada but it’s bad timing for Canadians about to embark on a trip south. The euro dipped to $1.0833, continuing to pull back from Thursday’s high of $1.0981 EUR= . The Toronto stock market was on track towards the biggest one-day decline since late September. Falling oil and weak metal prices underpinned bets central banks of export-reliant economies would embark on more stimulus to weaken their currencies in a bid help exporters.
