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Canadian dollar weakens 0.2% against greenback
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Hits weakest since Jan. 20 at 1.3475
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Price of U.S. oil settles 0.1% lower
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Ten-year yield touches near seven-week high
(Adds analyst quotes and details throughout, updates prices)
By Fergal Smith
TORONTO, Feb 16 (Reuters) - The Canadian dollar fell to a near four-week low against its U.S. counterpart on Thursday as U.S. inflation data weighed on sentiment and despite the Bank of Canada acknowledging the impact of last week's strong jobs report.
The loonie was trading 0.2% lower at 1.3425 to the greenback, or 74.49 U.S. cents, after touching its weakest level since Jan. 20 at 1.3475.
U.S. stock indexes slipped before paring some losses, as data showing the strongest rise in producer prices in seven months fed into fears that the Federal Reserve will keep raising interest rates to tame inflation.
"We got hotter-than-expected inflation data and more hawkish Fed commentary," said Erik Bregar, director, FX & precious metals risk management at Silver Gold Bull. "If you zoom out that's been the trend over the last week and a half."
Canada is a major exporter of commodities, including oil, so the currency tends to be sensitive to swings in investor sentiment.
U.S. crude oil futures settled 0.1% lower at $78.49 a barrel as a build in U.S. crude stockpiles offset prospects for a recovery in Chinese demand.
Bank of Canada Governor Tiff Macklem said that the economy remains overheated and the jobs market is too tight, as he kept the door open to higher interest rates.
Money markets see a roughly 80% chance that the central bank will tighten further by July.
Canadian government bond yields were mixed across a steeper curve. The 10-year touched its highest level since Dec. 30 at 3.317% before dipping to 3.290%, up 2.7 basis points on the day. (Reporting by Fergal Smith; Editing by Paul Simao and Sandra Maler)
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CANADA FX DEBT-C$ hits 4-week low as U.S. inflation data spooks investors - Yahoo Finance
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