TORONTO: The Canadian dollar weakened against its US counterpart on Friday as oil prices fell, but the loonie still advanced for a second consecutive week after the Bank of Canada said the challenges facing the economy were temporary.
The price of oil, one of Canada's major exports, fell on worries about a global economic slowdown. US crude oil futures
settled 1.9 percent lower at $51.59 a barrel.
Still, oil has rebounded about 22 percent since slumping in December to an 18-month low.
"Oil is interesting; super volatile fourth quarter, nice rebound thus far this year. It is still the hot factor," said Greg Anderson, global head of foreign exchange strategy in New York. "The CAD move (today) is almost tick for tick."
The three-month correlation between the Canadian dollar and oil has climbed to about 90 percent, according to Refinitiv Eikon data, indicating the currency and the commodity move mostly in the same direction. For some months in 2018 the correlation was negative.
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