Canadian dollar dips as investors weigh ECB's stimulus pledge

* Canadian dollar weakens 0.2% against the greenback

* Flash estimate shows Canadian factory sales up 1.9% in June

* Price of U.S. oil rises 0.7%

* Canadian bond yields ease across a flatter curve

TORONTO, July 22 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Thursday, giving back some of its gains over the last two days as dovish guidance from the European Central Bank helped to boost the greenback against a basket of major currencies.

The Canadian dollar CAD= was 0.2% lower at 1.2575 versus the greenback, or 79.52 U.S. cents, after trading a range of 1.2529 to 1.2593.

The U.S. dollar broadly rose after the ECB's pledge to keep interest rates at record lows for even longer pressured the euro EUR= , with the central bank warning that the Delta variant of the novel coronavirus posed a risk to the euro zone's recovery.

Canada is a major producer of commodities, including oil, so threats to global economic growth could weigh on the loonie. On Monday, the currency touched a five-month low at 1.2807.

Still, oil extended strong gains made in previous sessions on expectations of tighter supplies until the end of the year. U.S. crude CLc1 prices were up 0.7% at $70.80 a barrel.

In domestic data, a preliminary estimate from Statistics Canada showed that manufacturing sales rose 1.9% in June, led by the transportation equipment industry.

The Canadian retail sales report for May is due on Friday, which could offer further clues on the strength of the domestic economy.

Canadian government bond yields eased across a flatter curve, with the 10-year CA10YT=RR down 1.6 basis points at 1.206%. On Monday, it touched a five-month low at 1.097%.
Reporting by Fergal Smith; editing by Barbara Lewis

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.