Canadian dollar pares weekly gain as greenback rebounds

01/14/2022 | 03:32pm

TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Friday, giving back some of this week's gains, as the greenback broadly rebounded despite weaker-than-expected U.S. retail sales data.

The loonie was trading 0.3% lower at 1.2560 to the greenback, or 79.62 U.S. cents, after trading in a range of 1.2470 to 1.2570.

"It's been weighed down by a broad exodus of short USD positioning that was put on after the U.S. CPI report on Wednesday," said Erik Bregar, an independent foreign exchange analyst.

"This crowd didn't see the downside follow-through they wanted," Bregar added. "The inability for these USD shorts to further pounce on this morning's weak U.S. economic data set was the final straw."

U.S. retail sales dropped 1.9% in December, compared to estimates for an unchanged reading, as Americans struggled with shortages of goods and an explosion of COVID-19 infections.

Canada sends about 75% of its exports to the United States, including oil, which was boosted by supply constraints and worries of a Russian attack on neighboring Ukraine.

U.S. crude oil futures settled 2.1% higher at $83.82 a barrel, while the greenback snapped a three-day losing streak against a basket of major currencies.

For the week, the loonie was up 1% after sending a bullish signal to some investors by breaking the neckline of a head-and-shoulders trend reversal pattern at about 1.2600.

Canada will see a surge in cases of the Omicron variant of COVID-19 in coming weeks which could put significant new strains on the healthcare system, chief public health officer Theresa Tam said.

Canadian government bond yields climbed across the curve, tracking the move in U.S. Treasuries. The 10-year touched its highest since Nov. 25 at 1.772% before dipping to 1.764%, up 5.7 basis points on the day.

(Reporting by Fergal Smith; Editing by Nick Zieminski and Paul Simao)

By Fergal Smith

© Reuters 2022
Copier lien
Latest news about "Economy & Forex"
2h ago
2h ago
2h ago
2h ago
3h ago