NEW YORK (Reuters) – The Canadian dollar was slightly weaker against its U.S. counterpart on Monday, as oil prices were largely unmoved by a landmark deal by OPEC and its allies to cut output.
The Canadian dollar CAD=D4 was at C$1.3968 to the greenback, or 71.56 U.S. cents, weaker than Friday’s close of C$1.3953, or 71.7 U.S. cents.
The price of oil, one of Canada’s major exports, fluctuated on Monday as the positive impact of major producers agreeing on record global output cuts was offset by concerns they will not be sufficient to reduce a glut as the coronavirus outbreak hammers demand.
OPEC and allies led by Russia agreed on Sunday to a record cut in output to prop up oil prices amid the COVID-19 pandemic and said they had an unprecedented deal with fellow oil nations, including the United States, to curb global oil supply by 20%.
Measures to slow the spread of the coronavirus have destroyed demand for fuel and driven down oil prices, straining budgets of oil producers.
“CAD softness reflects the market’s dissatisfaction with the ‘historic’ oil production cuts agreed by OPEC+ last week and its lack of impact on WTI,” Shaun Osborne, chief FX strategist at Scotiabank in Toronto, said in a note.
Canadian government bond prices were mixed across the maturity curve, with the two-year CA2YT=RR up 5.1 basis points at 0.45% and the benchmark 10-year CA10YT=RR down 1 basis at 0.75%.
Reporting by Saqib Iqbal Ahmed; editing by Jonathan Oatis