TORONTO: The Canadian dollar gained modestly against the greenback on Wednesday following a weaker-than-expected report on US jobs and slightly stronger crude prices.
US private employers added 189,000 jobs in March, lower than the 225,000 expected, according to payrolls processor ADP. The report comes ahead of US government employment figures due on Friday, a holiday in Canada and in many US states.
The price of crude, a major Canadian export, edged higher as talks between Iran and six world powers over Tehran's nuclear program continued past deadline, damping expectations of an imminent deal that could flood an already over-supplied market with Iranian crude.
"Those two things combined are the two main drivers of the small Canadian dollar strength this morning," said Greg Moore, senior currency strategist at RBC Capital Markets.
At 9:34 a.m. (1334 GMT), the Canadian dollar was at C$1.2647 to the greenback, or 79.07 US cents, a touch stronger than Tuesday's close of C$1.2666, or 78.95 US cents.
Moore expects the currency will likely trade between C$1.2785 and C$1.26 in the very near term.
Investors were also digesting data that showed Canadian manufacturing activity shrank for a second month in March. The RBC Canadian Manufacturing Purchasing Managers' index (PMI), a measure of manufacturing business conditions, was at 48.9, against February's 48.7. A reading below 50 shows a contraction.
Moore said manufacturing activity has become a notable economic bellwether. The sector should benefit from cheaper oil prices and a lower Canadian dollar, but Tuesday's economic growth report suggested manufacturing was struggling.
Canadian government bond prices were mostly higher across the maturity curve, with the two-year rising 1 Canadian cent to yield 0.490 percent and the benchmark 10-year rising 27 Canadian cents to yield 1.329 percent.
Comments
Comments are closed for this article.