Canadian dollar touches one and half month low as data lifts greenback
By Solarina Ho
TORONTO (Reuters) - The Canadian dollar beat a sharp retreat against its U.S. counterpart on Monday, hurt by oil prices that fell on expectations that OPEC production levels will stay elevated, while the greenback was lifted by economic data.
The U.S. dollar rose against key currencies on figures that showed stronger-than-expected manufacturing activity in May and that construction spending picked up sharply in April, boosting expectations a U.S. interest hike is likely this year.
Those data points followed an unexpectedly flat April reading of U.S. consumer spending that suggested the economy was struggling to gain momentum early in the second quarter.
"We have this underlying assumption that Q2 is going to be better ... We just need to see a lot of data before we're 100 percent convinced that core assumption is correct," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York, who sees no chance the U.S. Federal Reserve will move on rates in June.
The Canadian dollar CAD=D4, which was underperforming its currency counterparts, finished at C$1.2535 to the greenback, or 79.78 U.S. cents, softer than the Bank of Canada's official close of C$1.2437, or 80.41 U.S. cents, on Friday.
At one point on Monday, the currency touched its weakest level in 1-1/2 months, trading at C$1.2563, far off its session high of C$1.2440.
Monday's numbers were the first of a raft of North American data this week, culminating in U.S. and Canadian employment figures for May on Friday. ECONCAECONUS
"This is a good data point today, no question about it, but the big data is on Friday. There's a limit to how far you want to extend yourself long USD/CAD ahead of twin payrolls," Anderson said. Continued...