The Canadian dollar weakened against its U.S. counterpart on Thursday as oil prices fell and interest rate hikes by central banks around the world added to investor worries that tighter monetary policy could derail economic growth.
Wall Street added to recent declines after the Federal Reserve’s biggest interest rate hike since 1994 fanned recession worries.
The Swiss National Bank raised its policy interest rate for the first time in 15 years in a surprise move on Thursday, while the Bank of England increased borrowing costs by a quarter of a percentage point.
Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to the outlook for the global economy.
Oil fell 2.1% to $112.91 a barrel, while the Canadian dollar was trading 0.4% lower at 1.2944 to the greenback, or 77.26 U.S. cents.
It traded in a range of 1.2862 to 1.2958, after touching on Wednesday its lowest intraday level in more than one month at 1.2995
Domestic data showed that Canada’s wholesale trade decreased by 0.5% in April from March on a drop in fertilizer imports from Russia, as well as lower prices and volumes for lumber and other wood products.
Canadian government bond yields were higher across the curve. The 10-year touched its highest level since May 2010 at 3.664% before dipping to 3.538%, up 7.8 basis points on the day.