Canadian Dollar Slumps Amid Volatile Oil Prices And China Concerns

The Canadian dollar has declined to its lowest level in 11 days against the U.S. currency as oil prices remain volatile and concerns grow regarding rising COVID-19 cases in China.

The loonie fell 0.4% yesterday (November 21) to trade at 1.3440 to the U.S. dollar, or 74.40 U.S. cents. The Canadian dollar is now at its lowest level since November 10 of this year.

Investors are fleeing to the safe-haven of the U.S. dollar as COVID-19 lockdowns in China spread, heightening worries that the global economy could fall into a recession.

The price of oil, one of Canada's major exports, continues to be volatile with prices rising and falling on media reports that Saudi Arabia and other oil producers are planning to increase their daily output by a half-million-barrels.

West Texas Intermediate (WTI) crude oil settled 0.4% lower at $79.73 U.S. a barrel on November 21.

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Canada's yield curve has inverted further during November, potentially sending a stronger signal that the economy is headed for an economic recession in coming months.

The 10-year yield fell 3.9 basis points to 3.086%, pulling it 2.3 basis points below the two-year rate to a gap of roughly 87 basis points, the largest divide since data started being collected in 1994.