(Adds analyst quotes and details throughout; updates prices) * Canadian dollar weakens 0.2% against the greenback
(Adds analyst quotes and details throughout; updates prices)
*
Canadian dollar weakens 0.2% against the greenback
*
For the week, the loonie ends up 0.4%
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Touches its strongest since Nov. 25 at 1.3323
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10-year yield touches a near four-week low
TORONTO, Jan 13 (Reuters) – The Canadian dollar weakened
against its U.S. counterpart on Friday, but the currency kept
much of its weekly gain on optimism about a sustained downturn
in inflation that could encourage the Federal Reserve to turn
less hawkish.
The loonie was trading 0.2% lower at 1.3390 to the
greenback, or 74.68 U.S. cents, after touching its strongest
level since Nov. 25 at 1.3323.
For the week, it strengthened 0.4%, its fourth consecutive
weekly gain.
“The main focus is still on the USD, and CAD direction being
driven by (moves in) equities,” said Amo Sahota, director at
Klarity FX in San Francisco. “The loonie, although stronger
(this week), is not keeping up with the gains being seen in
other major FX.”
The U.S. dollar was trading near a seven-month low
against a basket of major currencies, while a gauge of global
stocks rose for a sixth straight session as investors assessed
the start of U.S. earnings season and the path of inflation.
It follows U.S. data on Thursday that fueled hopes for a
sustained downward trend in inflation, potentially giving the
Fed room to scale down the size of its rate hikes.
Canada sends about 75% of its exports to the United States,
including oil.
U.S. crude futures settled 1.9% higher at $79.86 a
barrel, adding to this week’s gains, helped by the prospect of
less aggressive tightening by the Fed and signs of demand growth
in top oil importer China.
Canadian consumer price index data for December, due
Tuesday, could offer clues on the Bank of Canada policy outlook.
Canadian government bond yields were mixed across the curve
on Friday. The 10-year touched its lowest level
since Dec. 19 at 2.858% before recovering to 2.900%, little
changed on the day.
(Reporting by Fergal Smith; Editing by Richard Chang)
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