Canadian dollar adds to weekly advance as greenback slides

Toronto

THE Canadian dollar strengthened to a near three-week high against its US counterpart on Friday last week, as the greenback broadly declined in thinner than usual trading conditions following the previous day's US Thanksgiving holiday.

The loonie was trading 0.2 per cent higher at 1.2983 to the greenback, or 77.02 US cents, having touched its strongest intraday level since Nov 9 at 1.2972.

For the week, the currency was up 0.9 per cent.

"The move in the Canadian dollar is in sync with what we're observing in most other developed market currencies. That's a reflection of the weaker US dollar," said Bipan Rai, North America head, FX strategy at CIBC Capital Markets.

"Thinner than usual liquidity" during the North American trading session contributed to the move, Mr Rai said.

The US dollar hit its lowest level in almost three months, after strong economic data from China favoured commodity currencies over safe havens and equity markets continued their rally.

Canada is a major exporter of commodities, including oil.

US crude oil futures settled 18 cents lower at US$45.53 a barrel but still notched its fourth straight week of gains ahead of an Opec+ meeting early this week.

Canada will reveal this week, the breadth of the emergency spending that it has made during the pandemic and lay the groundwork for future stimulus and social measures, like a national childcare programme, government sources told Reuters.

The country's economy could rebound faster than expected if consumer spending jumps in the wake of a successful novel coronavirus vaccination effort, Bank of Canada governor Tiff Macklem said on Thursday last week.

Canadian government bond yields eased across much of the curve on Friday, with the 10-year yield down 1.4 basis points at 0.677 per cent. REUTERS