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Canadian dollar recovers from 2-week low as oil rallies - REUTERS
- Canadian dollar strengthens 0.1% against the greenback
- Touches its weakest intraday since Sept. 15
- Price of U.S. oil settles 3.6% higher
- Canadian 10-year yield touches a 16-year high
TORONTO, Sept 27 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Wednesday as a jump in oil prices offset recent weakness in equity markets, with the currency recovering from its lowest level in nearly two weeks.
The loonie was trading 0.1% higher at 1.3504 to the greenback, or 74.05 U.S. cents, after touching its weakest intraday level since Sept. 15 at 1.3542.
The currency has seesawed "as the positive influence of rising oil prices competes with the negative influence of falling stock prices," said Erik Bregar, director, FX & precious metals risk management at Silver Gold Bull.
"Zooming out ... the last week has been challenging because of the upside breakout in U.S. bond yields and how the broader FX market has been forced to rush back into U.S. dollars more broadly as a result."
The U.S. 10-year yield was up 5.4 basis points at 4.612%, its highest level in 16 years, while the U.S. dollar (.DXY) added to its recent gains against a basket of major currencies.
The price of oil, one of Canada's major exports, settled 3.6% higher at $93.68 a barrel after a steep drop in U.S. crude stocks compounded worries of tight global supplies.
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Canadian government bond yields moved higher across the curve, tracking moves in U.S. Treasuries. The 10-year touched its highest since December 2007 at 4.117% before dipping to 4.093%, up 7.5 basis points on the day.
Ontario, Canada's most populous province and one of the world's biggest sub-sovereign borrowers, reported a deficit of C$5.9 billion ($4.4 billion) for the 2022-23 fiscal year, public account documents showed.
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That was wider than an interim estimate of C$2.2 billion in March, while personal income tax revenue fell 16% below the March estimate.
Reporting by Fergal Smith; Editing by Alison Williams
