Canadian dollar clings to weekly gain as factory sales rise

TORONTO: The Canadian dollar edged higher against its US counterpart on Friday as the greenback broadly fell and a domestic preliminary estimate showed that factory sales rose in March, with the loonie on track to advance for the fourth straight week.

Canadian factory sales rose 3.5% in March from February, Statistics Canada said in a flash estimate, adding to evidence of economic recovery.

The US dollar fell against a basket of major currencies after better-than-expected flash purchasing managers' index numbers for the euro zone boosted the euro.

The Canadian dollar was trading 0.1% higher at 1.2486 to the greenback, or 80.09 US cents, having traded in a range of 1.2470 to 1.2508.

For the week, it was also up 0.1%. It follows slender gains in the prior three weeks.

On Wednesday, the loonie touched its strongest intraday level in one month at 1.2455 after the Bank of Canada signaled it could start hiking interest rates in late 2022. The central bank sharply boosted its outlook for the Canadian economy and cut the pace of bond purchases.

The price of oil, one of Canada's major exports, rose on Friday as support from a European economic recovery countered record levels of coronavirus infections in India. US crude prices were up 0.3% at $61.6 a barrel.

Canadian government bond yields were little changed across the curve, with the 10-year trading at 1.513%.

The gap between it and the US 10-year yield steadied at 4 basis points in favor of the US bond, having narrowed from 19 basis points at the start of the month.