TORONTO: The Canadian dollar gave back session gains against its US counterpart on Thursday, weakening on the back of softer crude prices and a US dollar that pared earlier losses.
The US dollar, which has been bruised by a string of soft US data that has deflated expectations of a rosier second quarter, was off the day's lows, but headed for another session loss against a basket of currencies.
"Some people thought maybe USD was a little oversold. We've had quite a large swing over the last three to four weeks," said Rahim Madhavji, President at KnightsbridgeFX.com.
"People are trying to buy a little bit on dips, because we hit close to a recent low earlier this morning ... It's all about the economic data that's coming out and it doesn't look so good for the US"
The price of oil, a major Canadian export, softened in choppy trading on ample global supplies. US crude prices were down 1.24 percent to $59.75, while Brent crude lost 0.34 percent to $66.58.
The Canadian dollar ended at C$1.1999 to the greenback, or 83.34 US cents, weaker than the Bank of Canada's official close of C$1.1967, or 83.56 US cents, on Wednesday.
The currency was well off the C$1.1920 hit earlier, its strongest level since mid-January. Its weakest level was C$1.2007.
Madhavji expects USD/CAD to remain rangebound between C$1.19 and C$1.23 over the next couple of months as investors wait for more economic data before making an assessment on the health of the US economy and its implications for when the Federal Reserve will finally hike interest rates.
Concerns have grown as second-quarter data, including April retail sales figures on Wednesday and US producer prices on Thursday, have underwhelmed.
A bright spot was an unexpected fall in the number of Americans filing new claims for unemployment benefits, suggesting the job market was still stable despite the recent sluggish economic data.
Canadian government bond prices were higher across the maturity curve, with the two-year up 5 Canadian cents to yield 0.671 percent and the benchmark 10-year rising 22 Canadian cents to yield 1.807 percent.
The Canada-US two-year bond spread was 12.7 basis points, while the 10-year spread was -43.4 basis points.
Comments
Comments are closed for this article.