Canadian dollar steadies as exporter confidence soars

TORONTO: The Canadian dollar was little changed against the greenback on Thursday as a dip in oil prices offset domestic data showing confidence among exporters has surged to its highest level in more than 20 years.

Export Development Canada's Trade Confidence Index jumped 19% from end-2020 to mid-2021 amid mounting optimism that a sustained global economic recovery is underway.

One of Canada's major exports is oil. It fell 0.5% to $72.74 a barrel but held close to its highest level in almost three years, supported by drawdowns in US inventories and accelerating German economic activity.

The Canadian dollar was trading nearly unchanged at 1.2299 to the greenback, or 81.31 US cents, after trading in a range of 1.2282 to 1.2314.

It has gained 1.3% this week, clawing back some of the previous week's decline, as the market reassessed a hawkish shift in guidance by the US Federal Reserve.

Investors have been struggling to interpret signals from the Fed about how hot it is willing to let inflation run before it begins unwinding pandemic-era monetary stimulus.

Preliminary data for May from Statistics Canada showed factory sales rising 1% from April and wholesale trade up 1.1%.

Canadian government bond yields eased across the curve, tracking the move in US Treasuries. The 10-year was down about 1 basis point at 1.411% but holding well above the 3-1/2-month low it hit last Friday at 1.364%.