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C$ firms as market calms; Canada data mixed

C$ firms as market calms; Canada data mixedTORONTO: The Canadian dollar firmed against the greenback on Friday, recouping earlier losses as investors digested data from the United States and Canada, and as calm returned to markets following a volatile trading week.

In Canada, manufacturing sales jumped in 1.2 percent in June, the biggest gain since March and a welcome sign of economic activity following an overall lackluster first half of the year. Figures still fell short of economists’ elevated projections for a 2.1 percent rise, however.

The US dollar pared losses against a basket of key counterparts following US producer price data for July that showed signs of some pickup in inflation, which added to market expectations the Federal Reserve could be hiking interest rates as early as next month.

The price of US crude, a major Canadian export, rose on Friday after having fallen to its cheapest level in 6-1/2 years.

At 9:47 a.m. EDT (1347 GMT), the Canadian dollar was trading at C$ 1.3047 to the greenback, or 76.65 US cents, slightly firmer than the Bank of Canada’s official close of C$ 1.3064, or 76.55 US cents.

The currency stayed within a narrow trading range, however, between C$ 1.3031 and C$ 1.3087.

The Canadian dollar is expected to trade between C$ 1.30 and C$ 1.31 against the US dollar on Friday, according to KnightsbridgeFX.com.

Canadian government bond prices were mostly lower across the maturity curve, with the two-year price down 1.5 Canadian cents to yield 0.422 percent and the benchmark 10-year falling 15 Canadian cents to yield 1.415 percent.

The Canada-US two-year bond spread was -30.8 basis points, while the 10-year spread was -79.5 basis points.

Copyright Reuters, 2015

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