The Canadian dollar hardly moved against its U.S. counterpart on Friday as oil prices fell and domestic data showed the economy shrinking in July, leaving the currency on track to edge lower for the week as the greenback broadly climbed.
Canada’s economy contracted 0.1 per cent in July, weighed by a decline in the goods-producing sector, data from Statistics Canada showed. A preliminary estimate showed GDP increasing 0.7 per cent in August.
The price of oil, one of Canada’s major exports, fell on the prospect that OPEC+ producers might step up a planned increase in output to ease supply concerns.
U.S. crude prices fell 0.8 per cent to $74.44 a barrel, while the Canadian dollar was nearly unchanged at 1.2675 per greenback, or 78.90 U.S. cents. The currency traded in a range of 1.2652 to 1.2738.
For the week, the loonie was down 0.2 per cent. It weakened 0.5 per cent in September, its fourth straight monthly decline.
The U.S. dollar headed for its best week since June as investors expected a hawkish-sounding Federal Reserve to lift U.S. interest rates sooner than some major peers.
Canadian government bond yields were lower across a flatter curve as trading resumed following Thursday’s public holiday.
The 10-year eased 5 basis points to 1.458 per cent, tracking the move lower in U.S. Treasury yields. On Tuesday, it touched its highest in nearly four months at 1.526 per cent.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.