Investing.com - The commodity linked Canadian dollar slid lower against the U.S. dollar on Monday as oil prices fell on the back of weak Chinese factory data and fading hopes for a deal to cut output in an effort to tackle a global supply glut.
USD/CAD was up 0.21% to 1.4010 after rising to highs of 1.4061 earlier.
Oil prices fell after data on Monday showing that China’s manufacturing sector contracted at the fastest pace since 2012 in January added to worries about slowing demand from the world's top energy consumer amid the largest supply glut in decades.
Oil was also hit by fading prospects of a coordinated production cut by major exporters to prop up prices.
The Canadian dollar had finished higher against the U.S. dollar on Friday after gross domestic product data from the U.S. and Canada broadly matched expectations and after the Bank of Japan shocked markets by adopting negative interest rates.
Canada’s economy resumed growth in November, expanding by 0.3%, Statistics Canada said Friday. That followed zero growth in October and a decline of 0.5% in September.
The data underpinned gains in the loonie, as the Canadian dollar is also known, since the Bank of Canada left interest rates on hold at 0.5% earlier in January.
The U.S. economy grew at an annual rate of 0.7% in the fourth quarter, official data showed, slowing from growth of 2% in the third quarter.
The U.S. economy grew 2.4% in 2015 the Commerce Department said, matching similar growth in 2014.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slid 0.37% to 99.23.
The Institute of Supply Management was to release what would be closely watched data on U.S. manufacturing activity later in the day.