Weak oil prices weigh on loonie rally
2024-05-13
Summary:
The Canadian dollar slipped Monday after a modest weekly gain. Strong Canadian job data and weak US numbers boosted the loonie.
The Canadian dollar dipped on Monday following a modest weekly gain. A stronger-than-expected jobs report in Canada and a surprisingly weak one in the US helped push loonie higher.
Canada's economy added 90,400 jobs in April, five times the number that was forecast. Money markets see a 44% chance of an interest rate cut by the BOC in June, down from nearly 60% previously.
Investors also weighed readings from the University of Michigan's survey of consumer sentiment which showed year-ahead inflation expectations of 3.5% in May, the highest level since November.
Oil prices extended declines amid signs of weak fuel demand. Still, the market remained underpinned by views that the OPEC+ could extend supply cuts in to the second half of the year.
Crude inventories fell by 1.4 million barrels in the week ending 3 May, the EIA said, compared with analysts' expectations in a poll for a decline of 1.1 million barrels.
OPEC will stop publishing a calculation of the world's demand for its own crude in its monthly oil report, two sources close to the matter said, focusing instead on forecasts for demand for OPEC+'s oil.
The Canadian dollar is hold above its 50 SMA which serves to rein in selling. A push above 1.3730 is need to signal a more bullish bias.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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