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Canadian dollar recovers from 3-week low
THE Canadian dollar strengthened against its US counterpart on Friday but still declined 0.4 per cent for the week as recent comments from the Bank of Canada weighed on the currency and higher US Treasury yields boosted the greenback.
At 4 pm EDT, the Canadian dollar was trading 0.3 per cent higher at C$1.2831 to the greenback, or 77.94 US cents. It touched its weakest since April 3 at C$1.2900.
"We had over the last few days some dovish statements coming out of the Bank of Canada," said Hosen Marjaee, senior managing director, Canadian fixed income at Manulife Asset Management.
"They became a bit more concerned about the strength of the Canadian economy, so that took away some expected rate hikes out of the curve and that pushed the Canadian dollar weaker."
The loonie has declined more than two per cent since the Bank of Canada last week held its benchmark interest rate steady at 1.25 per cent and said it did not know when or how aggressive it would need to be to keep inflation in check.
The central bank has worried about uncertainties that could hurt the economy, including a shift toward protectionist global trade policies.
Negotiators trying to hammer out a quick deal to revamp the North American Free Trade Agreement said they will take a break until May 7, allowing time for consultations with the vehicle industry in Mexico and for US Trade Representative Robert Lighthizer to visit China.
Speculators have trimmed bearish bets on the Canadian dollar for the third straight week, data from the US Commodity Futures Trading Commission and Reuters calculations showed.
As at April 24, net short positions had fallen to 25,144 contracts from 30,324 a week earlier.
US crude oil futures settled 0.1 per cent lower at US$68.10 a barrel. Oil is one of Canada's major exports.
The US dollar held steady despite a government report showing slower US first-quarter economic growth, with the currency on track to end its strongest week since November 2016. REUTERS