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Canadian dollar holds near 2-month low as oil falls

Kitco News

TORONTO, Dec 2 (Reuters) - The Canadian dollar barely moved against its U.S. counterpart on Thursday, holding near its lowest level in over two months as investors weighed the global economic impact of the Omicron coronavirus variant and looked ahead to domestic data.

Global equity markets remained volatile, with European stocks sinking, as countries impose new travel restrictions. read more

The price of oil, one of Canada's major exports, fell as investors awaited an OPEC+ decision on supply policy amid fears that the variant could hit fuel demand. read more

U.S. crude prices were down 2% at $64.23 a barrel, while the Canadian dollar was nearly unchanged at 1.2821 to the greenback, or 78.00 U.S. cents.

The currency traded in a range of 1.2778 to 1.2834, after touching on Tuesday a 10-week low at 1.2837.

The Canadian employment report for November is due on Friday, which could offer clues on the strength of the domestic economy.

Data on Tuesday showed the economy roared back to life in the third quarter, with growth most likely accelerating in October on a manufacturing rebound. read more

But the variant and recent flooding in the western province of British Columbia that cut off a major port from the rest of Canada could weigh on prospects for the final quarter.

The Bank of Canada, which has signaled it could begin hiking rates as soon as April, is due to make an interest rate decision next Wednesday.

Canadian government bond yields were mixed across a flatter curve, tracking the move in U.S. Treasuries.

The 2-year rate edged up nearly half a basis point to 0.946%, while the 10-year touched its lowest intraday level since Oct. 4 at 1.472% before recovering slightly to 1.475%, down 1.7 basis points on the day.

Reporting by Fergal Smith; editing by Barbara Lewis
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