The Canadian dollar weakened against its U.S. counterpart on Friday, retaining this week’s defensive bias as domestic data showed the economy stalled in February, offsetting a rebound in oil prices.
Canadian gross domestic product was flat in February, matching the forecast by analysts in a Reuters poll, after robust growth in January. “It is a soft month in an otherwise solid quarter,” said Derek Holt, head of capital markets economics at Scotiabank.
Oil prices rose after dropping to a one-month low the previous day, prompting investors to buy at cheaper levels ahead of a May Organization of the Petroleum Exporting Countries meeting at which producers could extend output cuts. At 9:01 a.m. ET (1301 GMT), the Canadian dollar was trading at C$1.3653 to the greenback, or 73.24 U.S. cents, weaker than Thursday’s close of C$1.3624, or 73.40 U.S. cents.
The currency traded in a range of C$1.3625 to C$1.3666.
On Thursday, the loonie touched a fresh 14-month low at C$1.3670. It is on course to fall 1.1 percent this week, pressured by recent weakening in oil prices and a more uncertain outlook for the North American Free Trade Agreement. Canadian government bond prices were slightly lower across the yield curve in sympathy with U.S. Treasuries. The two-year dipped 1.5 Canadian cents to yield 0.742 percent and the 10-year declined 5.2 Canadian cents to yield 1.581 percent.
On Thursday, the 10-year yield touched a three-week high at 1.621 percent.
via Kitco
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Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
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