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Canadian dollar gives back 2021 gains as risk appetite crumbles - Reuters News

Canadian dollar gives back 2021 gains as risk appetite crumbles - Reuters News

Canadian dollar gives back 2021 gains as risk appetite crumbles - Reuters News

  • Canadian dollar weakens 1.1% against the greenback
  • Loonie touches its weakest level since Feb. 5 at 1.2807
  • Price of U.S. oil falls 3.5%
  • Canadian 10-year yield touches its lowest level since Feb. 19

TORONTO, July 19 (Reuters) - The Canadian dollar weakened to a five-month low against its U.S. counterpart on Monday as a worldwide surge in coronavirus cases weighed on investor sentiment, with the currency shifting into negative territory since the start of the year.

The safe-haven U.S. dollar rallied and stocks globally were facing their longest losing streak since the pandemic first hit global markets 18 months ago, as the continued spread of the highly-contagious Delta variant raised doubts about the strength of economic recovery. (Full Story) (Full Story)

Canada is a major producer of commodities, including oil, so the loonie is sensitive to global economic prospects.

U.S. crude oil futures CLc1 fell 3.5% to $69.27 a barrel after OPEC+ overcame internal divisions and agreed to boost output, sparking concerns about a crude surplus. (Full Story)

The Canadian dollar CAD= was trading 1.1% lower at 1.2749 to the greenback, or 78.44 U.S. cents, its biggest decline in nearly five months. It touched its weakest intraday level since Feb. 5 at 1.2807.

The currency has slumped 5.9% since notching in June a six-year high near 1.20, while it is down 0.1% since the start of 2021.

Speculators have cut their bullish bets on the Canadian dollar to the lowest level in ten weeks, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of July 13, net long positions had fallen to 26,376 contracts from 41,178 in the prior week.

Canadian government bond yields were lower across a flatter curve, tracking the move in U.S. Treasuries. The 10-year CA10YT=RR touched its lowest level since Feb. 19 at 1.170% before recovering slightly to 1.176%, down 6.5 basis points on the day.

Oil falls more than $2 after OPEC+ producers agree to raise output - Reuters News

By Noah Browning

LONDON, July 19 (Reuters) - Oil prices fell sharply on Monday after OPEC+ overcame internal divisions and agreed to boost output, sparking concerns about a crude surplus as COVID-19 infections rise in many countries.

Brent crude LCOc1 was down $2.54, or 3.4%, at $71.05 a barrel by 1235 GMT. U.S. oil CLc1 was down $2.64, or 3.6%, at $69.17 a barrel. Both benchmarks recorded their largest declines since early April.

OPEC+ ministers agreed on Sunday to increase oil supply from August to cool prices that this month hit their highest level in more than two years as the global economy recovers from the COVID-19 pandemic.

The group of members of the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia also agreed new production shares from May 2022. (Full Story)

"Longer-term, free and additional production capacities from OPEC+ countries are the key reason why we see oil moving lower again," said Julius Baer analyst Carsten Menke.

"We remain confident that the oil market is in the final phase of its upcycle."

Goldman Sachs, however, said it remained bullish on the outlook for oil and the agreement was in line with its view that producers "should focus on maintaining a tight physical market all the while guiding for higher future capacity and disincentivising competing investments."

But PVM Oil analyst Tamas Varga sounded a note of caution on the pace of the expected recovery of demand from the pandemic.

"The global COVID situation is turning dire again and it understandably makes investors wary although it must be stressed that restrictions are being eased in other parts of the world."


https://fingfx.thomsonreuters.com/gfx/ce/qzjvqxxwbpx/BrentCurveJuly19vsJuly62021.png

OPEC+ last year cut output by a record 10 million barrels per day (bpd) as the pandemic hollowed out demand, prompting a collapse in prices with U.S. oil futures prices at one point falling into negative territory.

OPEC+ producers have gradually eased their output curbs, which now stand at around 5.8 million bpd.

To overcome internal divisions, OPEC+ agreed new production quotas for several members from May 2022, including the UAE, Saudi Arabia, Russia, Kuwait and Iraq.

UK shopper numbers up 0.9% last week on weather boost - Reuters News

LONDON, July 19 (Reuters) - Shopper numbers across Britain rose 0.9% in the week to July 17 compared with the previous week, boosted by the return of sunny weather, researcher Springboard said on Monday.

It said the overall increase in shopper numbers, or footfall, was driven by a 3.3% rise in high street shopper traffic, which more than offset declines of 0.8% and 2.2% in retail parks and shopping centres respectively.

"There was a glimmer of hope for the hospitality industry, as the most gains in footfall were made post 5 p.m. as shoppers took the opportunity provided by hot weather to enjoy hospitality venues," said Diane Wehrle, Springboard's insights director.

High street footfall post 5 p.m. rose by 9.8% from the week before compared with 1.9% up to 5 p.m.

Springboard said overall UK footfall was down 24.9% compared with the same week in 2019, before the pandemic started to disrupt traffic.

The pandemic has hammered Britain's retailers, already struggling with high rents and business taxes, tight margins and online competition. Hundreds of store closures and thousands of job losses have been announced.

Springboard forecast that shopper numbers will rise by nearly one fifth this week versus the previous week thanks to the lifting of most remaining COVID-19 restrictions in England on Monday.

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