Canadian dollar hits 5-week low in risk-off trading
The commodity-linked Canadian dollar weakened to a five-week low against its U.S. counterpart on Wednesday as an investor rethink of Federal Reserve interest rate cut prospects contributed to a sell off in riskier assets. Canadian yields for shorter-dated bonds have matched the move higher in U.S. Treasury yields which "suggests to us that it is deteriorating risk conditions in the driving seat for the loonie today," Kyle Chapman, FX markets analyst at Ballinger & Co in London, said in a note. Canada is a major producer of commodities, including oil, so the currency tends to be sensitive to shifts in investor sentiment.
