Canadian Dollar Weakens As China Stimulus Underwhelms  

• The Canadian dollar weakened against its U.S. counterpart on Tuesday, giving back some recent gains, as investors worried that a slowdown in China could weigh on the global economy, reducing the demand for commodities like oil, of which Canada is a major producer.
• U.S. crude oil futures settled 1.8% lower at $70.50 a barrel on Tuesday, pressured by forecasts for slower oil demand growth in China and disappointment with the size of cuts in China's key lending rates.
• On Wednesday, the Bank of Canada will release minutes for its policy decision two weeks ago. The BoC hiked its benchmark rate for the first time since January to slow the economy and lower inflation to a target of 2%.
• With China’s post-COVID economic reopening being much slower than expected, this may influence the Canadian economy’s productivity due to softer demand for its commodities. This may cause lower transport and fuel fees to the country. The market's appetite for risk has been dialled back, said Darren Richardson, chief operating officer at Richardson International Currency Exchange Inc. "If China is having problems, that could signal problems in other parts of the globe," Richardson said.

(Source: Reuters)