2 Min Read
TORONTO, May 4 (Reuters) - The Canadian dollar jumped to a fresh four-month high against the U.S. currency on Monday then eased as the price of oil pared early gains, while thin market conditions contributed to volatile swings.
The Canadian dollar rallied as high as C$1.1799 to the U.S. dollar, or 84.75 U.S. cents, its highest level since Jan. 9, on the back of the rising price of oil that reached above $53 a barrel, before retreating as low as C$1.1900 to the U.S. dollar, or 84.03 U.S. cents.
Oil, a key Canadian export, often sets the direction of the Canadian dollar. Meanwhile, markets in Britain and Japan were closed for holidays, and made swings in the currency exaggerated at times.
"Even given the whippiness, we're sputtering around the 200-day moving average for dollar/Cad. You're getting the markets debate between: are we in a position where we need to blow definitively through the 200-day or is it time to take some money off the table," said David Watt, senior currency strategist at RBC Capital Markets.
At 9:00 a.m. (1300 GMT), the Canadian dollar was at C$1.1823 to the U.S. dollar, or 84.58 U.S. cents, up from C$1.1859 to the U.S. dollar, or 84.32 U.S. cents, at Friday's close.
No Canadian economic data was due on Monday, but market players will be on watch for employment data, the Ivey Purchasing Managers' Index, and housing reports due out this week.
Canadian bonds were slightly weaker across the curve as equity markets looked set to rise at the open. Bond prices typically move inversely to stocks when risk appetite is on the rise.
U.S. supply remained the key focus this week. (Reporting by Ka Yan Ng; Editing by Jeffrey Hodgson)