By Fergal Smith -
A Canadian dollar coin, commonly known as the "Loonie"
TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Wednesday, pulling back from a seven-week high, as volatility in the cryptocurrency market weighed on investor sentiment.
The loonie weakened 0.7% to 1.3520 per greenback, or 73.96 U.S. cents, after trading in a range of 1.3412 to 1.3541. On Tuesday, the currency touched its strongest level since Sept. 21 at 1.3385.
"The plunge that we have seen in the crypto space over the last two days caught up with risk sentiment today, resulting in weak stock and commodity prices," said George Davis, chief technical strategist at RBC Capital Markets.
"The risk-off move has boosted the USD across the board."
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Investors fretted about the financial health of major cryptocurrency exchange FTX, with some questioning whether a rescue deal from bigger rival Binance would materialize.
The U.S. dollar climbed against a basket of major currencies and U.S. stock indexes fell as the outcomes of tightly contested U.S. midterm elections remained unclear.
Investors were shifting focus to U.S. inflation data on Thursday for clues on the path of future interest rate hikes by the Federal Reserve.
The Bank of Canada is also expected to tighten further. Its governor, Tiff Macklem, is due on Thursday to give a speech on the evolution of the Canadian labour market.
The price of oil, one of Canada's major exports, settled 3.5% lower at $85.83 a barrel on Wednesday, after industry data showed that U.S. crude stockpiles rose more than expected and on concerns that a rebound in COVID-19 cases in top importer China would hurt fuel demand.
Canadian government bond yields eased across a flatter curve, with the 10-year down 5.8 basis points at 3.421%.
(Reporting by Fergal Smith; editing by Jonathan Oatis)
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