Canadian dollar pulls back from 3-year high as greenback rallies
The Canadian dollar edged lower against its U.S. counterpart this week, retreating from a near three-year high
Reuters
The greenback rallied against a basket of major currencies, while data showed Canada’s trade deficit narrowing in November.
The loonie was trading 0.1% lower at 1.2682 to the greenback, or 78.85 U.S. cents. The currency traded in a range of 1.2663 to 1.2733. On Wednesday, it touched its strongest level since April 2018 at 1.2626.
“General USD strength was the driver,” Ronald Simpson, managing director, global currency analysis at Action Economics, said. “The slightly narrower Canadian (trade) shortfall had little impact.”
“Canada’s jobs report could offer clues on how well the domestic economy is coping with a second wave of the coronavirus pandemic”
The U.S. dollar rebounded from levels not seen since March 2018 to its highest in a week, helped by profit-taking by investors who had been betting on the euro.
Canada’s trade deficit narrowed to C$3.3 billion in November from a revised C$3.7 billion in October as exports increased and imports edged down, data from Statistics Canada showed.
One of Canada’s major exports, oil, rose to an 11-month high. It was supported by Saudi Arabia’s unexpected pledge to deepen its oil cuts, with the market shrugging off political unrest in the United States.
U.S. crude oil futures settled 0.4% higher at $50.83 a barrel, while global shares and U.S. bond yields rose on bets of more pandemic-related financial relief under a Democratic-controlled U.S. Congress.
Canadian government bond yields were higher across a steeper curve. The 10-year rose 3.3 basis points to 0.791%, having touched its highest intraday level since Dec. 7 at 0.807%.
Canada’s jobs report for December is due on Friday. It could offer clues on how well the domestic economy is coping with tightening provincial restrictions to help contain a second wave of the coronavirus pandemic.
Reporting by Fergal Smith; Editing by Paul Simao and Peter Cooney
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