The Canadian dollar nudged
higher against its U.S. counterpart on Friday as oil prices
steadied and domestic data showed a drop in industrial capacity
to a record low, but the loonie ended the week lower after
climbing for five straight weeks.
The loonie was trading 0.1% higher at 1.3180 to the
greenback, or 75.87 U.S. cents, having traded in a range of
1.3151 to 1.3207. It ended the week 0.9% lower.
A rebound in the U.S. dollar and lower oil prices weighed on
the Canadian dollar this week, said Colin Cieszynski, chief
market strategist at SIA Wealth Management.
The move "looks like a trading correction," said Cieszynski,
adding "it was getting overbought by the end of August."
On Sept. 1, the loonie notched a near eight-month high at
U.S. crude oil prices settled 0.1% higher on Friday
but were down for a second straight week, as investors expect a
global glut to persist due to sagging demand with COVID-19 cases
rising in some countries.
The production capacity of Canadian industries tumbled to
70.3% in the second quarter from 79.8% in the first quarter due
to shutdowns to battle the coronavirus outbreak, Statistics
Separate data from the agency showed the ratio of Canadian
household debt-to-income posted a record decline in the second
quarter, falling to 166.8%, not seasonally adjusted, from a
revised 171.1% in the first quarter.
Speculators have cut their bearish bets on the Canadian
dollar to the lowest in six weeks, data from the U.S. Commodity
Futures Trading Commission showed. As of Sept. 8, net short
positions had fallen to 17,355 contracts from 27,006 in the
Canadian government bond yields were mixed across a flatter
curve, with the 10-year easing 1.4 basis points to
(Reporting by Fergal Smith
Editing by Paul Simao and Tom Brown)