TORONTO (Reuters) - The Canadian dollar edged slightly lower against the greenback on Thursday morning following a sharp sell-off triggered by growing doubts over the outlook for the global economy.
Global stock markets, which tend to influence the direction of the Canadian currency, were mixed as Asian stock markets fell to a near-three week low while European shares and New York futures were relatively flat.
"(The Canadian dollar) will take its cue from the broader market sentiment, which is biased in favor of risk aversion at the moment," said Jack Spitz, managing director of foreign exchange at National Bank Financial.
"The market has been buying the dollar and the Swiss franc this morning so Canada's lack of major reaction has actually seen it pick up on most crosses."
Wednesday's flight from riskier assets was prompted by fears about the U.S. economy in particular showing signs of stumbling, which earlier in the week prompted the U.S. Federal Reserve to announce steps to hold down borrowing costs.
A spate of data from China has also confirmed its rapid imports and factory output growth to be slowing.
At 8:01 a.m. EDT, the currency was at C$1.0469 to the U.S. dollar, or 95.52 U.S. cents, down from Wednesday's finish at C$1.0453 to the U.S. dollar, or 95.67 U.S. cents.
"There are a number of influences that are somewhat conflicted in terms of where to push the Canadian dollar in terms of its breakout. A week ago it was below C$1.02 and now it's looking at potentially trading above C$1.05," said Spitz.
Piercing C$1.05, he added, could send the Canadian currency as weak as C$1.0587, a level last seen on July 20.
"At the moment, given the global backdrop, it appears as though the Canadian dollar is likely headed for additional weakness but that could easily change tomorrow in the event that (U.S.) CPI and retail sales exceed expectations."
With no major Canadian economic releases scheduled for the day, investors may take some direction from data on U.S. initial jobless claims and trade price indices.
Canadian bond prices were also little changed.
The two-year bond was up half a Canadian cent to yield 1.342 percent, while the 10-year bond lost 12 Canadian cents to yield 2.984 percent.
(Reporting by Claire Sibonney, Editing by Chizu Nomiyama)
