TORONTO, May 12 (Reuters) – The Canadian dollar edged lower against its U.S. counterpart on Thursday as investors grew more nervous about global economic prospects and awaited a speech by a senior Bank of Canada official, but the move stopped short of Tuesday’s 18-month low.
Equity markets globally sank to a 1-1/2-year low and the safe-haven U.S. dollar .DXY hit its highest level in two decades, as fears grew that fast-rising inflation will drive a sharp jump in interest rates that brings the global economy to a standstill. nL2N2X40QC
Bank of Canada Deputy Governor Toni Gravelle will speak on commodities, growth and inflation, which could help guide expectations for another half-percentage-point interest rate hike at the June 1 policy announcement. The central bank is due to make the deputy governor’s remarks available at 11:35 a.m. EDT (1535 GMT). BOCWATCH
The Canadian dollar CAD= was trading 0.1% lower at 1.3005 to the greenback, or 76.89 U.S. cents. The currency traded in a range of 1.2978 to 1.3047, after touching on Tuesday its weakest level since November 2020 at 1.3052.
The price of oil, one of Canada’s major exports, rose as recession fears were offset by supply concerns and geopolitical tensions in Europe. U.S. crude CLc1 prices gained 0.4% to $106.18 a barrel. nL2N2X403C
Canadian government bond yields were lower across the curve, tracking the move in U.S. Treasuries. The 10-year CA10YT=RR eased 9.2 basis points to hit its lowest level since May 4 at 2.912%.