The Canadian dollar CADUSD was little changed against its U.S. counterpart on Friday, holding on to this week’s gains, as oil prices rose and investors weighed weaker-than-expected U.S. retail sales data.
U.S. retail sales dropped 1.9 per cent in December, compared to estimates for an unchanged reading, as Americans struggled with shortages of goods and an explosion of COVID-19 infections.
Canada sends about 75 per cent of its exports to the United States, including oil, which was on course for a fourth weekly gain boosted by supply constraints and a weaker U.S. dollar.
U.S. crude prices on Friday rose 0.7 per cent to $82.65 a barrel, while the Canadian dollar was trading nearly unchanged at 1.2519 to the greenback, or 79.88 U.S. cents.
The currency traded in a range of 1.2470 to 1.2535, after touching on Thursday its strongest intraday level in more than two months at 1.2449.
For the week, the loonie was on track to gain 1 per cent after sending a bullish signal to some investors by breaking the neckline of a head-and-shoulders trend reversal pattern at about 1.2600.
Canada will sign onto a complaint against the United States over its interpretation of how free trade should apply to the continental auto industry, another sign of souring ties between the North American neighbours.
Canadian government bond yields edged higher across the curve. The 10-year touched its highest since Nov. 26 at 1.759 per cent before dipping to 1.715 per cent, up nearly one basis point on the day.
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