C$ gains ahead of jobs data as oil prices climb

Canadian dollar gains 0.2% against the greenback

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Canada’s trade deficit narrows in April

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Price of U.S. oil increases 2.2%

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10-year yield steadies near a 3-month low

By Fergal Smith

TORONTO, – The Canadian dollar strengthened against its U.S. counterpart on Thursday as oil prices rose and data showed some narrowing in Canada’s trade deficit, while investors awaited the release of monthly jobs reports for the U.S. and Canada.

The loonie was trading 0.2% higher at 1.3670 to the U.S. dollar, or 73.15 U.S. cents, after trading in a range of 1.3667 to 1.3709.

On Wednesday, the currency touched a near two-week low at 1.3741 after the BoC became the first G7 central bank to lower interest rates, cutting by 25 basis points to 4.75%.

Data due on Friday is expected to show Canada’s economy adding 22,500 jobs in May and the unemployment rate ticking up to 6.2% from 6.1%. U.S. jobs data for May is also due, expected to show an increase of 185,000.

Since the BoC has only just moved on rates, the U.S. employment report could have a bigger impact on the Canadian currency than Canada’s jobs report, said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC.

“The markets are going into the jobs data with very low U.S. yields. The risk would be, like we’ve seen other times this year, a firming of jobs data, bond yields bounce back.”

The U.S. 10-year yield has fallen 45 basis points from its April peak, pressuring the greenback against a basket of major currencies.

Canada posted a smaller-than-expected merchandise trade deficit of C$1.05 billion in April, as energy and gold helped exports grow faster than imports, data showed.

The price of oil, one of Canada’s major exports, was up 2.2% at 75.67 a barrel as the European Central Bank cut interest rates for the first time in roughly five years.

The Canadian 10-year yield was little changed at 3.388%, after touching a near three-month low during Wednesday’s session at 3.372%.

This article was generated from an automated news agency feed without modifications to text.

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Published: 06 Jun 2024, 11:52 PM IST