The Canadian dollar edged down against its US counterpart on Friday, making part of this week’s lead, as a grim projection of domestic COVID-19 cases overshadowed the rise in oil prices and a larger than expected increase in retail sales.
The Canadian dollar was trading 0.2% lower at 1.3091 against the greenback, or 76.39 US cents, after trading in a range of 1.3039 to 1.3096. For the week, the loonie rose 0.3%.
Canada’s director of public health has predicted that daily new cases of the coronavirus could climb to 60,000 by the end of the year, from less than 5,000 now. With a second surge across the country, several Canadian provinces were forced to reimpose restrictions on travel and business.
“COVID headlines in Canada have overwhelmed the good news about September’s retail sales and rising commodity prices,” said Michael Goshko, director of enterprise risk at Western Union Business Solutions.
The price of oil, one of Canada’s top exports, has been supported by successful COVID-19 vaccine trials, while new lockdowns in several countries to limit the spread of the coronavirus have capped gains. US crude oil futures rose nearly 1 percent to $ 42.15 a barrel.
Canadian retail sales rose 1.1 percent in September on higher sales at general merchandise stores, Statistics Canada reported. This exceeded the 0.2% gain expected by economists.
The data “crushed expectations,” but lockdowns could dampen the outlook for near-term growth, Goshko said.
Canadian government bond yields have been mixed on a flatter curve. The 10-year eased 1.6 basis points to its lowest level since November 9 at 0.659 percent.
On Thursday, rating agency Moody’s Investors Service confirmed Canada’s triple A rating, saying the risk of a significant and lasting deterioration in Canada’s economic or fiscal strength following the coronavirus crisis is low.
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