Canadian dollar weakens as oil prices and stocks slide

TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Wednesday as oil prices fell and a 13-month high for the greenback pressured emerging markets and global stocks.

A Canada Dollar note is seen in this June 22, 2017 illustration photo. REUTERS/Thomas White/Illustration

Stocks have been volatile in recent days due to the prospect of an economic crisis in Turkey spreading to other emerging market countries, particularly those that borrow in U.S. dollars.

The greenback .DXY rose against a basket of major currencies as data showed U.S. retail sales grew more than forecast in July.

Canada exports many commodities and runs a current account deficit so its economy could be hurt if the flow of trade or capital slows.

The price of oil, one of Canada’s major exports, was pressured by a weakening global economic growth outlook and data showing rising U.S. crude inventories.

U.S. crude oil futures CLc1 were down 1.1 percent at $66.31 a barrel.

At 9:21 a.m. EDT (1321 GMT), the Canadian dollar CAD=D4 was trading 0.4 percent lower at C$1.3117 to the greenback, or 76.24 U.S. cents. The currency, which touched a near 3-week low of C$1.3179 on Monday, traded in a range of C$1.3051 to C$1.3121.

Resales of Canadian homes rose 1.9 percent in July from June, notching the third straight monthly rise but remaining below the highs seen in recent years, the Canadian Real Estate Association said.

Canada’s manufacturing sales data for June is due on Thursday and the July inflation report on Friday.

Canadian government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries as government bonds benefited from safe-haven demand.

The 10-year CA10YT=RR rose 29 Canadian cents to yield 2.286 percent. Its yield touched its lowest since July 27 at 2.279 percent.

Reporting by Fergal Smith; Editing by Susan Thomas