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Loonie weakens as oil prices slump over OPEC production cut anxiety

Anxiety over the OPEC production cut agreement weakened oil prices Friday, along with the loonie.
Anxiety over the OPEC production cut agreement weakened oil prices Friday, along with the loonie. THE CANADIAN PRESS/Jonathan Hayward

The Canadian dollar weakened against its U.S. counterpart on Friday as oil fell and a recent selloff in the greenback lost some momentum.

Prices of oil, one of Canada’s major exports, are on track to end the week lower on lingering doubts over the extent of OPEC cuts, with sentiment worsened by concerns over the health of the Chinese economy after it reported the steepest falls in exports since 2009.

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U.S. crude prices were down 0.68 percent at $52.65 a barrel.

The U.S. dollar was little changed against a basket of major currencies, clawing back earlier losses after data showed U.S. retail sales rose solidly in December.

At 9:14 a.m. ET (1414 GMT), the Canadian dollar was trading at C$1.3151 to the greenback, or 76.04 U.S. cents, weaker than Thursday’s close of C$1.3132, or 76.15 U.S. cents.

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The currency’s strongest level of the session was C$1.3111, while its weakest was C$1.3168.

On Thursday, the loonie posted a near 3-month high at C$1.3028.

Recent gains for the loonie follow upbeat domestic data since the start of the year, including a surge in jobs in December and the first trade surplus in more than two years in November while a Bank of Canada survey pointed to improving business conditions.

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Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The two-year fell 1.5 Canadian cents to yield 0.782 percent and the 10-year declined 10 Canadian cents to yield 1.678 percent.

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Canadian Minister of Finance Bill Morneau will meet with Canada’s leading private sector economists to gather their views on the Canadian and world economies. The finance minister will be available to media at 10:15 a.m. ET (1515 GMT).

Reporting by Fergal Smith; Editing by Nick Zieminski

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