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US English

C$ underperforms G10 peers as oil suffers 'brutal' selloff

By Reuters_News

19:07, 4 August 2022

A Canadian dollar coin, commonly known as the
A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015.

By Fergal Smith

- The Canadian dollar edged lower against its broadly weaker U.S. counterpart on Thursday as a drop in oil prices offset data showing that Canada's trade surplus widened in June.

The loonie was trading 0.1% lower at 1.2850 to the greenback, or 77.82 U.S. cents, after moving in a range of 1.2819 to 1.2876. It was the only G10 currency to lose ground against the U.S. dollar .DXY.

"The Canadian dollar is coming under pressure as a brutal wave of selling grips crude markets," said Karl Schamotta, chief market strategist at Corpay.

"With (crude) inventories surging as the summer driving season draws to a close, investors are betting prices could come down further in the months ahead."

U.S. crude oil futures settled down 2.3% at $88.54 a barrel, the lowest level since before Russia's invasion of Ukraine in February. Oil is one of Canada's major exports.


0.64 Price
+5.690% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168


2,083.15 Price
+1.890% 1D Chg, %
Long position overnight fee -0.0191%
Short position overnight fee 0.0108%
Overnight fee time 22:00 (UTC)
Spread 0.50

Oil - Crude

79.49 Price
+1.850% 1D Chg, %
Long position overnight fee 0.0266%
Short position overnight fee -0.0485%
Overnight fee time 22:00 (UTC)
Spread 0.030


18,286.90 Price
+1.410% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 7.0

Canada's trade surplus widened to C$5.1 billion ($4.0 billion) in June, beating analyst expectations, as exports rose 2%.

Canada's employment report for July, due on Friday, could offer further clues on the strength of the domestic economy.

Analysts expect the loonie to rally over the coming year, betting the threat of recession will ease as the U.S. Federal Reserve and the Bank of Canada likely wind down rate-hike cycles in 2023, a Reuters poll showed.

Canadian government bond yields eased across a more deeply inverted curve. The 10-year was down 5 basis points at 2.669%, while it fell 4.7 basis points further below the 2-year to a gap of 51.2 basis points.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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