The Canadian dollar was little changed against its broadly stronger U.S. counterpart on Thursday, trading in a narrow range as the price of oil steadied below this year’s high and as investors awaited domestic jobs data on Friday.
Canada’s employment report for March will come as blockbuster Canadian job gains this year have helped bolster investor sentiment for the loonie, offsetting weak gross domestic product data and a slowdown in the global economy that could hurt Canada’s exports.
“In order for exports to do better the Canadian dollar needs to weaken,” said Bipan Rai, North America head of FX strategy at CIBC Capital Markets, who favours selling the currency should it rally.
The price of oil, one of Canada’s major exports, edged lower after posting a near five-month high on Wednesday, with rising U.S. production offsetting expectations of tight global supply. U.S. crude oil futures settled 0.6% lower at $62.10 a barrel.
At 2:49 p.m., the Canadian dollar was trading nearly unchanged at 1.3352 to the greenback, or 74.90 U.S. cents.
The loonie traded in a range of 1.3339 to 1.3373, while the U.S. dollar rose against a basket of major currencies after weak German economic data weighed on the euro.
In domestic data, the pace of purchasing activity climbed off a five-month low in March, according to Ivey Purchasing Managers Index data. The seasonally adjusted index rose to 54.3, from 50.6 in February, surpassing analysts’ expectations for 51.1.
Canadian Foreign Minister Chrystia Freeland cautioned against the idea of reopening a new continental trade pact with the United States and Mexico, saying it could be a “Pandora’s box.”
Canadian government bond prices were higher across a flatter yield curve, with the two-year up 2 cents to yield 1.577% and the 10-year rising 16 cents to yield 1.692%.