CANADIAN DOLLAR MOVES A CENT AGAINST U.S FRIDAY The Canadian dollar strengthened a cent against its U.S. counterpart on Friday, buoyed by stronger oil prices and data that showed domestic factory sales rose more than expected in September. Canadian manufacturing sales, which rose 2.1 percent, helped put a floor under the Canadian dollar. U.S. crude futures climbed on expectations of higher demand for heating oil following forecasts of a cold weekend in parts of the United States. The higher prices helped the commodities-linked loonie rebound the day after a drop in crude knocked the currency weaker. With oil prices moving the way they are, its no surprise the Canadian dollar had a positive day. And manufacturing shipments today, albeit second tier data, was very positive and was a big improvement from last months release and definitely well ahead of what expectations were for this month. The Canadian dollar closed at C$1.1277 to the greenback, or 88.68 U.S. cents, firmly stronger than Thursdays close of C$1.1376, or 87.90 U.S. cents. The Canadian dollar, which experienced whip-saw trading in recent sessions, was less than 0.4 percent stronger for the week. While analysts expect the Canadian dollar is likely to consolidate around current levels in the short-term, most see more weakness down the line for the loonie. I think were rangebound for the U.S. dollar-Canadian dollar for now and the next move is really going to have to come from a major data point. Next weeks inflation data or third-quarter gross domestic product at the end of the month are potential catalysts, while more signs of strength in the U.S. economy could also lift the greenback to the detriment of the loonie. The bias, for now, is you could still see a higher U.S. dollar-Canadian dollar, but I would admit that the rally in U.S. dollar-Canadian dollar has looked a little tired recently, maybe a bit overbought. Canadian government bond prices were mixed across the maturity curve, with the two-year down 1.5 Canadian cents to yield 1.013 percent and the benchmark 10-year up 6 Canadian cents to yield 2.037 percent. The yen recovered from seven-year lows against the dollar on Monday but remained under pressure having sunk across the board after shock data showed Japans economy slipping back into recession. The yen normally tends to rise as Tokyos stock market falls and that logic dragged the yen steadily higher as the Nikkei index sank 3 percent in the hours following gross domestic product numbers showing a 1.6 percent annualised fall. But the third-quarter data was so bad - consensus had been a 2.1 percent rise - that it also raised the prospect that the Bank of Japan will eventually print further quantities of money after a snap election many expect to be called this week. London investors sold the yen for the dollar in the first hour of trading, but it was still up 0.1 percent on the day against both the dollar and the euro. The euro was roughly stable against the dollar, having earlier risen 0.3 percent to $1.2556 as the dollar pulled back from its highs against the yen. The dollar index, a gauge of the greenbacks strength against a basket of key currencies, was up 0.05 percent at 87.569, just off a days high of 87.626 hit early in the Asian session. The Swiss franc traded at .12014 francs per euro, having hit a 26-month high of 1.2011, edging ever closer to the Swiss National Banks three-year-old cap of 1.20 francs per euro.
Posted on: Mon, 17 Nov 2014 13:33:57 +0000
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