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Canadian dollar steadies as data shows economy seesawing

Published 2020-06-19, 04:37 p/m
© Reuters.
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* Canadian dollar trades near flat against the greenback

* Canadian retail sales plunge 26.4% in April

* Price of U.S. oil increases 2.3%

* Canadian bond yields rise across a flatter curve

By Fergal Smith

TORONTO, June 19 (Reuters) - The Canadian dollar was little changed against the greenback on Friday after domestic data that was consistent with an economy regaining some ground in May after an April freefall and ahead of a speech next week by Bank of Canada Governor Tiff Macklem.

Canadian retail sales plummeted 26.4% in April, Statistics Canada data showed. That was a bigger drop than economists had expected but a flash estimate from the national statistical agency was for sales to rebound 19.1% in May. as the shutdown was a bit more intense, as things begin to reopen the initial rebound will likely be bigger," said Doug Porter, chief economist at BMO Capital Markets.

The Canadian dollar CAD= was trading nearly unchanged at 1.3600 to the greenback, or 73.53 U.S. cents. The currency traded in a range of 1.3547 to 1.3616, while it was down 0.1% for the week.

The steady performance for the loonie came ahead of a speech on Monday by Macklem, whose term as governor began earlier this month, that could help guide expectations for the Bank of Canada's large-scale asset purchase (LSAP) program.

"Any discussion on the path for LSAP's going forward by Macklem on Monday, or in central bank communications going forward, is likely to cause heightened volatility for the loonie," strategists at Monex Canada, including Simon Harvey, said in a note.

The price of oil, one of Canada's major exports, was bolstered by a promise from OPEC producers and allies to meet supply cuts. U.S. crude oil futures CLc1 settled 2.3% higher at $39.75 a barrel. government bond yields were higher across a flatter curve, with the 10-year CA10YT=RR up less than one basis point at 0.534%.

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