The Canadian dollar weakened against its U.S. counterpart on Thursday, pulling back from an earlier 10-day high as investors weighed a potential setback to hopes of progress in trade talks between the United States and China.
A report that a meeting between the U.S. and Chinese presidents to resolve a trade dispute was delayed capped gains for the price of oil, one of Canada’s major exports, after notching an earlier four-month high.
U.S. crude oil futures were up 0.5 per cent at $58.52 a barrel.
At 9:23 a.m. EDT, the Canadian dollar traded 0.3 per cent lower at 1.3338 to the greenback, or 74.97 U.S. cents. The currency touched its strongest intraday since Mar. 4 at 1.3287.
The decline for the loonie came as data from Statistics Canada showed the ratio of Canadian household debt to income widened to a record 174.0 per cent in the fourth quarter from a downwardly revised 173.6 per cent in the third quarter.
New home prices in Canada edged down by 0.1 per cent in January, following five unchanged months in a row, separate data showed.
Canada’s once-hot housing market has softened since the start of last year, weighed by tighter mortgage rules and five interest rate hikes from the Bank of Canada since July 2017.
Bank of Canada Senior Deputy Governor Carolyn Wilkins is due to speak later Thursday. The central bank will release her prepared remarks at 6:50 p.m. EDT.
Last week, the central bank said it expected the Canadian economy to be weaker in the first half of 2019 than it projected in January, and that it was watching developments in household spending, oil markets and global trade.
Canadian government bond prices were higher across the yield curve, with the two-year up 0.5 cent to yield 1.668 per cent, and the 10-year rising 7 cents to yield 1.758 per cent.