Canadian dollar weakens for third day as oil slides

A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto

By Fergal Smith

TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Wednesday as oil prices tumbled and despite minutes from the Bank of Canada's latest meeting showing that some policymakers saw the need for more interest rate hikes.

The loonie was trading 0.2% lower at 1.38 to the greenback, or 72.46 U.S. cents, after moving in a range of 1.3756 to 1.3814.

It was the third straight day of declines for the currency after it notched last week its biggest weekly gain since March.

Some of the currency's move in recent days has been part of a normal correction while the recent slide in the price of oil has also been a factor, said Darren Richardson, chief operating officer at Richardson International Currency Exchange Inc.

Oil, one of Canada's major exports, settled 2.6% lower at $75.33 a barrel on concerns over waning demand in the U.S. and China. Since the start of the week, oil has fallen more than 6%.

"When we see the losses it (oil) had this week, that's having an impact on the Canadian dollar," Richardson said.

The loonie is set to strengthen less than previously expected over the coming year once a slowdown in the domestic economy opens the door to Bank of Canada interest rate cuts, a Reuters poll found.

Some members of the BoC's policy-setting governing council saw the likely need for further interest-rate hikes when they left borrowing costs on hold on Oct. 25, minutes showed.

Canadian government bond yields were mixed across a flatter curve, tracking moves in U.S. Treasuries.

The 10-year touched its lowest level since Sept. 14 at 3.695% before recovering to 3.715%, down 4.4 basis points on the day.

(Reporting by Fergal Smith; editing by Diane Craft)