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Canadian dollar strengthens 0.1%
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Touches its weakest since Jan. 6 at 1.3581
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Price of U.S. oil settles nearly 2% higher
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10-year yield falls 4.7 basis points to 3.324%
(Adds dealer quotes and details throughout; updates prices)
By Fergal Smith
TORONTO, Feb 23 (Reuters) - The Canadian dollar edged
higher against its U.S. counterpart on Thursday as oil and
stocks rebounded, but the currency stayed within reach of an
earlier seven-week low.
The loonie was trading 0.1% higher at 1.3540 to the
U.S. currency, or 73.86 U.S. cents, after touching its weakest
intraday level since Jan. 6 at 1.3581.
The currency has been pressured this week by lower oil
prices, deteriorating investor sentiment and data showing that
inflation is falling at a faster pace in Canada than in the
United States, said Darren Richardson, chief operating officer
at Richardson International Currency Exchange Inc.
The inflation data could suggest that the Bank of Canada
leaves its benchmark interest rate on hold even as the Federal
Reserve continues to tighten, "making the USD much more
attractive to investors," Richardson said.
Canada's annual inflation rate eased more than expected in
January to 5.9%, data on Tuesday showed, which should allow the
BoC to keep its policy rate steady at 4.50% at its next meeting
in March while it lets previous rate increases sink in.
The price of oil , one of Canada's major exports,
settled nearly 2% higher at $75.39 a barrel on expectations of
steep cuts to Russian production next month, but was still down
since the start of the week.
The number of Americans filing new claims for unemployment
benefits unexpectedly fell last week, bolstering expectations
for additional tightening by the Federal Reserve.
Canada's labour market is also tight. Payroll employment
rose by 91,400, or 0.5%, in December from November, data from
Statistics Canada showed.
Canadian government bond yields eased across a flatter
curve. The 10-year was down 4.7 basis points at
3.324%, extending its pullback from a three-month high on
Tuesday at 3.447%.
(Reporting by Fergal Smith; Editing by Sharon Singleton and
Andrea Ricci)
