C$ dips as oil falls, greenback rises; further strength seen ahead

Thu Jun 15, 2017 4:54pm EDT
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By Solarina Ho

TORONTO (Reuters) - The Canadian dollar softened against the U.S. dollar on Thursday, paring some of this week's gains as lower oil prices and broader strength in the greenback offset stronger-than-expected domestic manufacturing data.

Canadian manufacturing sales topped forecasts and hit a record in April as sales of petroleum and coal products rebounded after two months of declines, data from Statistics Canada showed.

At 4:00 p.m. ET (2000 GMT), the Canadian dollar CAD=D4 was trading at C$1.3279 to the greenback, or 75.31 U.S. cents, down 0.2 percent.

The currency traded in a range of C$1.3226 to C$1.3308.

Oil prices touched six-month lows, under pressure from high global inventories and doubts about OPEC's ability to reduce the glut. U.S. crude CLc1 prices were down 0.72 percent to $44.41 a barrel.

Shaun Osborne, chief currency strategist at Scotiabank said the summer driving season usually means an increase in demand and tighter supply, but inventory data suggests significant excess glut.

The U.S. dollar .DXY rose against a basket of major currencies, supported by the Federal Reserve's decision on Wednesday to boost interest rates further.

On Wednesday, the loonie touched its strongest in 3-1/2 months at C$1.3165. It has gained 1.5 percent this week, helped by signals from the Bank of Canada that higher interest rates lie ahead.   Continued...

FILE PHOTO: A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015.  REUTERS/Mark Blinch/File Photo