TORONTO: The Canadian dollar rose moderately against the US dollar on Thursday as stronger than expected September wholesale sales numbers in Canada added to expectations that gross domestic product figures for that month will be robust.
Wholesale sales jumped 1.8 percent in September to a record C$54.03 billion, the latest economic data signaling stronger Canadian economic growth. Economists had forecast a rise of 0.8 percent.
"Wholesale was solid. It looks like September GDP is going to be plus 0.3, or maybe it could be even better, depending what retail shows next week," said Benjamin Reitzes, senior economist at BMO Capital Markets.
"It does look as though we'll bounce back after a very weak July and August. If we get a good October, that will bode pretty well for the fourth quarter."
At 9:26 a.m. (1426 GMT), the Canadian dollar, which was outperforming most other major currencies against the greenback, was trading at C$1.1319 to the US dollar, or 88.35 US cents, stronger than Wednesday's close of C$1.1351, or 88.10 US cents.
The loonie briefly lost some of its gains after the release of US inflation and jobless claims data. The figures showed the number of Americans claiming benefits fell less than expected last week, but was still the lowest since December 2000, pointing to a stronger labor market. And while consumer prices were unexpectedly flat last month, core inflation, which strips out food and energy prices, rose 0.2 percent.
On Friday, market attention will shift to Canadian consumer price index figures for October, with economists polled by Reuters expecting inflation to rise to 2.1 percent from 2 percent, and core inflation holding steady at 2.1 percent.
Reitzes said he doesn't expect the Canadian dollar to make any big moves outside of its recent trading range, however.
"Unless the data shows the momentum in Canada is changing materially or the US is picking up massively, it doesn't look like we're going to break out of this 2 to 3 cents range here," he said.
Canadian government bond prices were higher across the maturity curve, with the two-year rising 6.2 Canadian cents to yield 1.045 percent and the benchmark 10-year up 40.5 Canadian cents to yield 1.992 percent.
Comments
Comments are closed for this article.