he Canadian dollar strengthened on Friday against its U.S. counterpart, helped by higher oil prices and stronger-than-expected domestic manufacturing data. (Mark Blinch/Reuters)
The Canadian dollar strengthened on Friday against its U.S. counterpart, helped by higher oil prices and stronger-than-expected domestic manufacturing data.
Canadian manufacturing sales rose for the third straight month in January as nondurable goods sales increased, led by the petroleum and coal industry, data from Statistics Canada showed.
The 0.6 per cent gain beat expectations for a 0.2 per cent decline, while sales volumes were also solid, rising 0.7 per cent.
U.S. crude prices were up 0.76 per cent at $49.12 a barrel, as investors weighed the impact of the Organization of the Petroleum Exporting Countries’ production cuts against rising U.S. shale oil output and persistently high inventories.
Oil is one of Canada’s major exports.
At 9:07 a.m. ET (1307 GMT), the Canadian dollar was trading at $1.3309 to the greenback, or 75.14 U.S. cents, stronger than Thursday’s close of $1.3347, or 74.92 U.S. cents.
The currency traded in a range of $1.3308 to $1.3346. It touched on Thursday its strongest in more than two weeks at $1.3277.
The loonie’s gains came as the U.S. dollar hit a five-week low against a basket of currencies .
The greenback was pressured by the Federal Reserve’s cautious interest rate outlook and investor concern over a potentially protectionist slant to a G20 meeting this weekend.
Canada is committed to keeping the North American Free Trade Agreement as a trilateral accord, Canada’s trade minister said, in a sign of support for Mexico as it prepares for tough negotiations with the new U.S. administration.
About 75 per cent of Canadian exports go to the United States. Its economy could be hurt by renegotiation of NAFTA.
Canadian government bond prices were higher across the yield curve, with the two-year up 2.5 cents to yield 0.805 per cent and the 10-year rising 24 cents to yield 1.776 per cent.
The 10-year yield has pulled back from a 20-month high of 1.876 per cent reached on Monday.