C$ weaker as lower oil prices offset firm domestic data

Thu Jul 21, 2016 4:23pm EDT
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By Alastair Sharp

TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Thursday as renewed worries about a global oil glut weighed, more than offsetting stronger-than-expected domestic wholesale trade data.

Prices for oil LCOc1 CLc1, a major Canadian export, fell more than 2 percent after a rise in U.S. gasoline inventories helped push total U.S. petroleum supplies to a record high.

Meanwhile the value of Canadian wholesale trade surged by 1.8 percent in May from April, led by the motor vehicle and auto parts subsector, Statistics Canada said. In volume terms sales rose by 1.5 percent.

"Right now the main factor affecting the softness of the loonie is oil," said Alphonso Esparza, a senior market analyst at OANDA Corp, referring to the Canadian currency by its common colloquial name.

"Crude is being pushed downward just because of the comments from the Russian energy minister yesterday that there's no real back-and-forth or open line of communication with OPEC," he said.

Russia's Alexander Novak said there were no discussions about possible coordination with OPEC on oil output after a failed attempt to jointly maintain production levels earlier this year.

The Canadian dollar CAD=D4 ended the session at C$1.3086 to the greenback, or 76.42 U.S. cents, weaker than Wednesday's close of C$1.3055, or 76.60 U.S. cents.

The currency's strongest level of the session was C$1.3023, while its weakest was C$1.3101, its weakest intraday level since July 12.   Continued...

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