The Canadian dollar CADUSD was unchanged against its US counterpart on Friday, with the currency holding on to its prior day’s gains as global equity markets rose and despite domestic data showing factory sales fell for a fourth straight month.
Stocks rose and bond yields fell amid speculation of a British government U-turn on fiscal plans that have contributed to financial market volatility in recent weeks.
Canadian Prime Minister Justin Trudeau’s government should avoid new stimulus when it updates its fiscal plans this fall and focus instead on paying down debt as governments around the world face greater scrutiny managing their finances, analysts said.
Canadian factory sales fell 2.0 per cent in August from July on lower sales in petroleum and coal products as well as chemicals, Statistics Canada said. A separate report for August was more upbeat, showing wholesale trade increased by 1.4 per cent.
The Canadian dollar was unchanged at 1.3750 to the greenback, or 72.71 US cents, after trading in a range of 1.3705 to 1.3826.
It rebounded on Thursday from its weakest intraday level in more than two years at 1.3977. For the week, it was on track to dip 0.1 per cent.
The price of oil, one of Canada’s major exports, was pressured by global recession fears and weak oil demand, especially in China.
US crude prices fell 2.2 per cent to $87.14 a barrel, while the US dollar rebounded against a basket of major currencies.
The greenback lost ground on Thursday despite data showing an acceleration in underlying US inflation that cemented the case for additional aggressive interest rate hikes by the Federal Reserves.
Canadian government bond yields were lower across a flatter curve on Friday, with the 10-year falling 6.3 basis points to 3,357 per cent.