The Canadian dollar is posting modest gains at the end of the trading week, buoyed by higher energy prices and positive manufacturing data. Amid cratering crude prices, the loonie has struggled to find direction, mainly because traders are waiting to see what the Organization for Petroleum Exporting Countries (OPEC) will do relating to output.
Crude entered into a bear market after recording the longest stretch of losses in three decades. Since snapping the 12-session losing streak, oil has rebounded and pared some of its losses. While crude is still poised for a weekly loss of roughly 5%, prices are up to finish the trading week.
December West Texas Intermediate (WTI) crude futures advanced $0.31, or 0.55%, to $56.77 per barrel on the New York Mercantile Exchange. Despite the strong start to 2018, oil has lost all of its gains and has entered into negative territory by nearly 2%.
Investors are now keeping a close eye on manufacturing data. The market is anticipating a gain of 0.1% in October, an improvement from the 0.4% contraction in September.
South of the border, US retail sales recorded a 0.7% jump in October and the consumer price index (CPI) posted a 0.3% increase. This likely means the Federal Reserve will almost certainly raise interest rates at next monthâs Federal Open Market Committee (FOMC) policy meeting. The CME Group FedWatch tool pegs the number at 73%.
Earlier this week, the Bank of Canada (BOC) published its semi-annual survey, and it highlighted that respondents are far more worried about the global economic situation than anything occurring in Canada. BOC officials and leading economists have sounded the alarm about the debt, something that could be exacerbated as the central bank normalizes rates. The BOC is widely expected to raise rates in December and at least three times in 2019, a trend that could strengthen the loonie.
The USD/CAD currency pair dipped 0.05% to 1.3174, from an opening of 1.3179, at 16:16 GMT on Friday. The EUR/CAD soared 0.66% to 1.5027, from an opening of 1.4926.
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