Canadian dollar underperforms most G10 currencies as oil falls
TLT•The Canadian dollar was little changed at 1.4135 per U.S. dollar, underperforming most G10 currencies as oil prices fell and recent Canadian jobs data dampened expectations for a Bank of Canada rate hike. Investors saw a roughly 40% chance of a December BoC hike, compared with an 84% chance of a Fed hike.
1. Canadian dollar lags peers
The Canadian dollar steadied at 1.4135 per U.S. dollar, or 70.75 U.S. cents, near an 18-day low. Only the loonie and Swiss franc failed to gain against the greenback as investors rotated back into risk assets.
2. Jobs and rates weigh
Canadian employment fell for a third straight month in October and the unemployment rate rose to a six-month high of 6.7%, while separate data showed accelerating U.S. job growth. TD Securities strategists said diverging employment data would likely keep USD-CAD above 1.40, and said rising Canadian unemployment and falling wage growth reduced market pricing of a December BoC hike relative to the Fed. Minutes from the BoC's October meeting, when it raised rates for the first time in three years, were due Tuesday. U.S. crude futures fell 3.5% to $87.64 a barrel; Canada's 10-year government bond yield was down about half a basis point at 3.653%.
