C$ ekes out gain on manufacturing sales, oil

TORONTO: The Canadian dollar strengthened moderately against the greenback on Friday, bolstered by a forecast-beating jump in Canadian manufacturing sales in December and higher oil prices.

Data showed Canadian factory sales rose 1.7 percent to C$52.39 billion ($41.91 billion), surpassing economists' forecast for a gain of 1 percent. November's sales were revised slightly higher to a decline of 1.3 percent from an originally reported 1.4 percent drop.

"We could attribute some of the positive information to the weak Canadian dollar, which is making Canada look a bit more attractive to its US customers," said USForex currency strategist Lennon Sweeting, who expects the data to improve as the loonie depreciates further going forward.

"Overall, there's a mandate to improve manufacturing in Canada, as it definitely took a bit of a slowdown when the loonie was doing well against the dollar."

The Canadian dollar, which was outperforming many of its key counterparts, ended the session at C$1.2461 to the greenback, or 80.25 US cents, stronger than Thursday's finish at C$1.2490 or 80.06 US cents.

The loonie, which has stumbled nearly 7 percent since the start of the year, strengthened about half a percent for the week.

"The data was a nice surprise this morning. That was the main impetus this morning," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York.

Brent crude prices rose above $60 a barrel for the first time this year, while US crude rose 3 percent amid signs of deeper industry spending cuts and another drop in the US rig count. Skeptics were cautious, however, noting that oil supplies keep coming. Canada is a key oil exporter.

Sweeting and other strategists are advising clients to buy US dollars on these dips, given expectations that the greenback will continue to strengthen against the Canadian dollar and other key currencies.

Canadian government bond prices were lower across the maturity curve, with the two-year slipping 2 Canadian cents to yield 0.429 percent and the benchmark 10-year 29 Canadian cents to yield 1.426 percent.