Canadian dollar gains 0.2% against the greenback
Canada’s trade deficit narrows in April
Price of US oil increases 2.2%
10-year yield steadies near a 3-month low
By Fergal Smith
TORONTO, June 6 (Reuters) –The Canadian dollar strengthened against its US 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 US and Canada.
The loonie CAD= was trading 0.2% higher at 1.3670 to the US dollar, or 73.15 US 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 ratescutting 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%. US 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 US 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 (US) jobs data with very low US yields. The risk would be, like we’ve seen other times this year, a signing of jobs data, bond yields bounce back.”
The US 10-year yield has fallen 45 basis points from its April peak, pressing the greenback .DXY against a basket of major currencies.
Canada posted a smaller-than-expected merchandise trade deficit of C$1.05 billion ($765 million) in April, as energy and gold helped exports grow faster than imports, data showed.
The price of oilone 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 CA10YT=RR was little changed at 3.388%, after touching a near three-month low during Wednesday’s session at 3.372%.
Reporting by Fergal Smith; Editing by Josie Kao
