3 Min Read
* Canada manufacturing data misses expectations
* Lower oil prices add to drag on C$
* Bond prices largely unchanged
By Frank Pingue
TORONTO, May 15 (Reuters) - The Canadian dollar was lower versus the U.S. currency on Friday morning, pulled down by Canadian manufacturing shipment figures that came in weaker than expected and a slide in oil prices.
The week's key economic data showed manufacturing shipments fell by 2.7 percent in March from February. Analysts had expected 1 percent increase over February. [ID:nN15154382]
"We just had weaker than expected manufacturing shipments numbers and that doesn't exactly bode well for March GDP, so I think the Canadian dollar is trading off that," said Charmaine Buskas, senior economics strategist at TD Securities.
"So what was otherwise shaping up to be a halfway decent March GDP number for Canada has now sort of fallen back."
At 9:20 a.m. (1320 GMT), the Canadian currency was at C$1.1741 to the U.S. dollar, or 85.17 U.S. cents, down from C$1.1710 to the U.S. dollar, or 85.40 U.S. cents, at Thursday's close.
Buskas said the Canadian dollar's weakness was also due a bid for the greenback in the aftermath of better than expected U.S. inflation and manufacturing data. [ID:nN13408473] [ID:nNYS005065]
Another drag on the Canadian dollar came from a drop in the price of oil, a key Canadian export, which fell below $58 a barrel on weak demand after it had rallied to a six-month higher earlier this week. [ID:nSIN460588]
Further moves in the currency could be limited for the rest of the session with no Canadian data due for release and the likelihood of traders opting to get a head start on the long weekend in Canada. Monday is the Victoria Day holiday.
"If anything, we are going to see some pretty quiet trading for the rest of the day ... it's unlikely that the market is going to move significantly after these data are out," Buskas said.
Canadian bond prices were mixed and were expected to take their direction throughout the session from movements in North American equities.
Toronto's key stock market index rallied to a six-month high last week but has since taken a step back.
The benchmark two-year Canadian government was down 1 Canadian cent at C$100.29 to yield 1.105 percent, while the 10-year bond was off 6 Canadian cents at C$105.56 to yield 3.101 percent.
The 30-year bond was up 5 Canadian cents at C$119.60 to yield 3.851 percent. (Editing by Peter Galloway)