TORONTO (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Friday along with a rebound in Wall Street stocks, but a sharp decline a day earlier left the loonie with a weekly loss, ending a three-week winning streak.
The Canadian dollar was trading 0.2% higher on the day at 1.3595 to the greenback, or 73.56 U.S. cents. The currency traded in a range of 1.3527 to 1.3666.
The loonie was down 1.3% for the week, after climbing for each of the previous three weeks. On Wednesday, it reached its strongest level in more than three months at 1.3311.
“The souring mood in markets has lifted the USD from its COVID-depths and may keep the dollar’s key peers on the defensive in the short-run, particularly high-beta FX such as the CAD, AUD, and MXN,” strategists at Scotiabank, including Shaun Osborne, said in a note.
Beta is a measure of a financial asset’s volatility compared to the market. Canada is a major exporter of commodities, including oil, so the loonie tends to be sensitive to the outlook for the global economy.
U.S. stocks rallied a day after their biggest daily dive in about three months, while U.S. crude oil futures settled 0.2% lower at $36.26 a barrel.
Canadian industries ran at 79.8% of capacity in the first quarter of 2020, down from an upwardly revised 81.4% in the fourth quarter, Statistics Canada said.
Separate data from Canada’s national statistics agency showed that producer prices, in a flash estimate, gained 1.2% in May from April, led by strong gains in meat prices as COVID-19 closed down packing plants.
Canadian government bond yields were mixed across the curve, with the 10-year up less than a basis point at 0.529%. Still, the 10-year yield has tumbled nearly 24 basis from last Friday’s peak.
Reporting by Fergal Smith; editing by Jonathan Oatis and David Gregorio