Canadian Dollar Loses Ground as Oil Prices and Economic Weakness Weigh

The Canadian dollar weakened against the U.S. dollar on Monday, as early gains failed to hold. The loonie was trading around C$1.4258 per U.S. dollar by 10:02 a.m. ET, having earlier risen to C$1.4238 before retreating. The session high reached C$1.4294. This move keeps the currency near last week’s levels, which saw an 18-month low due to widening interest-rate gaps and softer oil prices.

The loonie has now declined for four straight weeks, dropping about 0.8% last week. Weakness in Canada’s services sector added to the pressure, with the S&P Global Business Activity Index improving slightly to 48.3 in September but remaining in contraction territory. New business and export orders continued to shrink, while input costs rose.

Canadian equities also reflected caution, with the S&P/TSX Composite Index opening 0.2% lower at 35,449.39. Energy stocks led the decline as oil prices fell. West Texas Intermediate crude dropped about $1.10 to roughly $90 a barrel. Meanwhile, U.S. Treasury yields climbed, with the 10-year yield around 3.98%, though Canadian yields remained lower.