TORONTO (Reuters) – The Canadian dollar edged lower against its U.S. counterpart on Wednesday, pulling back from a seven-week high, as oil prices fell and investors awaited the results of the closely watched U.S. midterm elections.
Global equity markets dipped and the U.S. dollar rose against a basket of major currencies as control of the U.S. Congress and Democratic President Joe Biden’s agenda was unclear after the midterm vote.
The price of oil, one of Canada’s major exports, fell after industry data showed that U.S. crude stockpiles rose more than expected and on concerns that a rebound in COVID-19 cases in top importer China would hurt fuel demand.
U.S. crude prices were down 0.5% at $88.45 a barrel, while the Canadian dollar weakened 0.1% to 1.3440 to the greenback, or 74.40 U.S. cents, after trading in a range of 1.3414 to 1.3466.
On Tuesday, the currency touched its strongest level since Sept. 21 at 1.3385. It has been helped by broader declines for the greenback in recent days and Canadian jobs data last Friday that bolstered expectations for additional interest rate hikes by the Bank of Canada.
BoC Governor Tiff Macklem is due on Thursday to give a speech on the evolution of the Canadian labour market. Investors are also awaiting U.S. inflation data on Thursday.
Canadian government bond yields were mixed across the curve, with the 10-year up half a basis point at 3.484%.
Canada is due to auction C$3.5 billion ($2.6 billion) of 5-year bonds. The bidding deadline has been set for 12 p.m. ET (1700 GMT).
(Reporting by Fergal Smith; editing by Jonathan Oatis)
