TORONTO, Oct 10 (Reuters) - The Canadian dollar fell for a seventh consecutive day against the U.S. dollar on Thursday as investors assessed the likelihood of the Federal Reserve pausing its rate cuts while awaiting domestic employment data that could influence the Bank of Canada's monetary policy outlook.
The loonie was trading 0.3% lower at 1.3750 to the U.S. dollar, or 72.73 U.S. cents, after reaching its weakest level since August 7 at 1.3775.
Erik Bregar, director of FX & precious metals risk management at Silver Gold Bull, commented, "This Canadian-dollar selloff is getting nuts, all on the heels of growing speculation that the Fed won't cut rates at all in November."
Atlanta Federal Reserve Bank President Raphael Bostic noted that the recent volatility in employment and inflation data might justify maintaining current rates next month.
Despite a slight rise in U.S. consumer prices in September, driven by increased food costs, the annual increase of 2.4% marked the smallest rise in over three and a half years.
Bregar added, "This reaction (in markets) is way overdone ... I think the Canadian dollar is a steal here and should be bought."
Looking ahead, Canada's monthly employment report, expected on Friday, is projected to show an addition of 27,000 jobs in September, with the unemployment rate rising to 6.7%.
Market expectations suggest that the Bank of Canada may ease interest rates for a fourth consecutive meeting on October 23, with a one-third chance of increasing the pace of easing from 25 basis points to 50 basis points.
Additionally, the price of oil, a major Canadian export, surged 3.8% to $76.01 a barrel, bolstered by a spike in U.S. fuel usage ahead of Hurricane Milton's landfall in Florida.
Canadian bond yields also decreased, with the 2-year yield down 7.3 basis points at 3.203%.
Source: Reuters, October 10, 2024