The Canadian dollar weakened against the U.S. dollar Friday, dropping 0.69 of a cent to 93.48 cents (U.S.).
With no economic releases scheduled in either Canada or the United States, currency is trading on “broader market themes,” Camilla Sutton, Scotiabank’s chief FX strategist said in a note.
The U.S. dollar has been gaining strength against the loonie in recent weeks amid expectations that the American economy will outpace Canada’s in 2013 and 2014.
“The U.S. economy is expected to do really well in 2014 from a macro perspective,” said Allan Small, a senior investment adviser of the Allan Small Financial Group with HollisWealth.
“We’re getting better but we’re not firing on as many cylinders as the United States. Therefore their dollar is a lot more stronger than ours, and that’s why you’re seeing some Canadian weakness.”
He said he wouldn’t be surprised to see the loonie fall to the 90 cents (U.S.) range, a theory which has been forecasted by investment firm Goldman Sachs.
“Obviously with a weak dollar makes our exports a lot more enticing and we’ll export a lot more down to the U.S. They’ll buy a lot more to us,” said Small.
“It actually could be a positive thing, not so much a negative thing. (Except) it would be negative if you’re doing some shopping over in Buffalo.”
On the commodity markets, February crude on the Nymex climbed 87 cents to $100.42 (U.S.) a barrel.
Gold prices saw an uptick after plunging to three-year lows last week. The February contract on the New York Mercantile Exchange jumped $2.40 to $1,214.70 (U.S.) an ounce.
March copper dipped a penny to $3.39 (U.S.) a pound.
Earlier this week, the Bank of Canada announced that deputy governor John Murray will step down on April 30, 2014. Murray has overseen the central bank’s analysis of domestic and international economic developments.