Canadian Dollar Recovers
Saturday Nov 16th, 2019
Canadian dollar recovers from one-month low as risk appetite climbs
The Canadian dollar strengthened against its U.S. counterpart on Friday, lagging behind some other commodity-linked currencies but recovering from a one-month low the day before as investors grew more hopeful about a U.S.-China trade deal.
At 3:18 p.m., the Canadian dollar was trading 0.2 per cent higher at 1.3226 to the greenback, or 75.61 U.S. cents.
The currency, which hit a one-month low at 1.3270 on Thursday, traded in a range of 1.3217 to 1.3252. For the week, the loonie was nearly unchanged.
Wall Street’s main stock indexes hit record highs after White House economic adviser Larry Kudlow said on Thursday that the United States and China were nearing a deal.
Canada is a major exporter of commodities, including oil, so its economy could benefit from an improved global trade outlook. U.S. crude oil futures settled 1.7 per cent higher at $57.72 a barrel.
There is “a bit more of a pro-risk bias in the markets that has lifted the commodity currencies generally but CAD has been left behind in that move,” said Shaun Osborne, chief currency strategist at Scotiabank.
Commodity-linked currencies, such as the Australian dollar
and the New Zealand dollar posted stronger gains than the loonie, up 0.4 per cent and 0.3 per cent respectively.
“We are pretty much in a holding pattern here around about 1.3250 (in USD-CAD) until we get some more information and we should get some more information next week,” Osborne said.
Canada’s inflation report for October is due next Wednesday and September retail sales data is due next Friday, both of which could help guide expectations for Bank of Canada interest rate cuts.