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CANADA FX DEBT-Canadian dollar slips as trade balance swings to surprise deficit

Published 2021-05-04, 10:22 a/m
Updated 2021-05-04, 10:24 a/m
© Reuters.

© Reuters.

* Canadian dollar weakens 0.3% against the greenback

* Canada posts a C$1.1 billion trade deficit in March

* Price of U.S. oil rises 1.2%

* Canada's 10-year yield was unchanged at 1.522%

TORONTO, May 4 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Tuesday as the greenback broadly climbed and data showed Canada's trade balance swinging to a surprise deficit in March, with the loonie pulling back from a recent 3-year high.

Canada's trade deficit was C$1.1 billion in March, Statistics Canada said. Analysts had predicted a surplus of C$700 million after a revised C$1.4 billion surplus in February.

Separate data showed that the value of Canadian building permits rose by 5.7% in March from February. housing construction and resales have bolstered the outlook for Canada's economy after it was hammered in 2020 by the coronavirus crisis. Last month, the Bank of Canada projected that GDP would increase 6.5% this year.

The Canadian dollar CAD= was trading 0.3% lower at 1.2316 to the greenback, or 81.20 U.S. cents, having traded in a range of 1.2274 to 1.2345. Last Friday, the loonie touched its strongest since February 2018 at 1.2262.

The U.S. dollar .DXY rose against a basket of major currencies, partially unwinding a month-long decline, as risk appetite faded with investors awaiting upcoming data and policy speeches for clues. price of oil, one of Canada's major exports, climbed after more U.S. states eased lockdowns and the European Union sought to attract travelers, though soaring COVID-19 cases in India capped gains. U.S. crude CLc1 prices were up 1.2% at $65.27 a barrel. government bond yields were mixed across the curve, with the 10-year CA10YT=RR unchanged at 1.522%.

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