Canadian dollar drops for fourth day as stocks slide

Canadian dollar drops for fourth day as stocks slide

* Canadian dollar weakens 0.4% against greenback

* Touches its weakest level since July 15 at 1.3061

* Price of U.S. oil settles 0.6% lower

* 10-year yield touches one-month high

By Fergal Smith

TORONTO, Aug 22 (Reuters) - The Canadian dollar weakened to its lowest level in more than five weeks against its U.S. counterpart on Monday, as investors worried about the global economic outlook and awaited an influential central bank conference this week.

The Canadian dollar CAD= was trading 0.4% lower at 1.3050 to the U.S. dollar, or 76.63 U.S. cents, its fourth straight day of declines. The currency touched its weakest level since July 15 at 1.3061.

"Weaker stocks and softer oil prices remain headwinds for the CAD, and while the BoC (Bank of Canada) policy backdrop remains supportive in broad terms, we feel, there is little opportunity for the CAD to differentiate itself from the USD ahead of the key Jackson Hole event," strategists at Scotiabank, including Shaun Osborne, said in a note.

Equity markets globally .WORLD fell and the U.S. dollar rose against a basket of major currencies as fears mounted that inflation-busting interest rate hikes in the United States and Europe will weaken the global economy.

Federal Reserve Chair Jerome Powell is due to speak at the Jackson Hole symposium in Wyoming on Friday, with expectations growing of further rate hikes rather than a pivot to a more dovish policy.

Canada is a major producer of commodities, including oil, so its currency tends to be sensitive to shifts in risk appetite. U.S. crude oil futures CLc1 settled 0.6% lower at $90.23 a barrel.

In economic news, Canadian new home prices increased 0.1% in July from June, data from Statistics Canada showed. It was the smallest increase since June 2020.

Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries. The 10-year CA10YT=RR rose 7.4 basis points to 3.022%, its highest since July 21.
Reporting by Fergal Smith; Editing by Paul Simao and Tomasz Janowski