TORONTO: The Canadian dollar eased against the US dollar on Tuesday as data showing the Canadian trade deficit widened in April kept the currency under pressure.
Canada's trade deficit in April jumped as imports hit a record high and exports eased slightly, the latest indication that exporters' woes are crimping the economy, Statistics Canada data indicated.
"The Canadian data was more or less as expected, a little bit on the soft side - the bounce back into deficit," said Don Mikolich, executive director, foreign exchange sales at CIBC World Markets, adding that investors sought safety in the greenback, which rose against a basket of major currencies.
The Canadian dollar finished the North American session at C$1.0344 versus the US dollar, or 96.67 US cents, softer than Monday's finish at C$1.0278, or 97.30 US cents.
The US trade deficit widened less than expected in April, though the widening in the so-called real trade deficit could prompt economists to reduce their already low estimates for second-quarter gross domestic product.
Higher taxes and government spending cuts have curbed consumer spending in the United States and weighed on the country's manufacturing activity.
"Canada was able to outperform for a while, and now it's starting to look more in line with the US in terms of its economic activity - if anything, maybe underperform. I think that has weighed on the Canadian dollar," said David Tulk, chief Canada macro strategist at TD Securities.
Canada's dollar, which was mostly weaker against other currencies except for its commodities counterparts - the Australian and New Zealand dollars - kept within its recent trading range between C$1.0261 and C$1.0389.
Prices for Canadian government debt were mixed. The two-year bond rose 1 Canadian cents to yield 1.066 percent, while the benchmark 10-year bond fell 22 Canadian cents to yield 2.077 percent.
Comments
Comments are closed.