The Canadian dollar pared its weekly gain to close out the trading week, driven primarily by slumping energy prices. But the loonieâs drop was capped by better-than-expected manufacturing data. Still, the Canadian dollar is poised for a significant 1% weekly advance against the US dollar as the currency continues its rebound following an abysmal first half of 2020.
According to Statistics Canada, manufacturing sales surged 20.7% in June, up from an 11.6% boost in May. The reading was better than the market forecast of 16.4%, and it was the biggest month-to-month surge on record. Manufacturing sales rose in all 21 industries, led by motor vehicle and motor vehicle parts. Despite the historic gain, total manufacturing sales were 13.2% below their pre-pandemic level in February.
Earlier this week, it was reported that housing starts clocked in better than the median estimate of 210,000, with a total of more than 245,000. The Canadian real estate market has been booming in recent months. Toronto, the nation’s biggest housing market, shattered records in July and inched closer to the $1 million average.
On Friday, energy markets are seemingly playing an integral role in the loonieâs performance as crude oil is ending the week in the red. September West Texas Intermediate (WTI) crude futures slumped $0.40, or 0.95%, to $41.84 per barrel at 18:30 GMT on Friday on the New York Mercantile Exchange. October natural gas futures are rallying more than 8% to $2.36 per million British thermal units (btu).
Canadaâs biggest export continues to be oil and gas, so any change in price â high or low â can have an impact on the currency and in the broader economy.
The bond market was red across the broad. The benchmark 10-year government bond dipped 2.7 basis points to 0.612%, while the 30-year bond fell 0.2 basis-point to 1.126%. But the long-term bond had touched its highest intraday level in two months at 1.148%.
The USD/CAD currency pair rose 0.17% to 1.3247, from an opening of 1.3226, at 18:35 GMT on Friday. The EUR/CAD advanced 0.39% to 1.5685, from an opening of 1.5621.
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Canadian Dollar Pares Gain on Weaker Energy, Capped by Strong Manufacturing
