Canadian Dollar Edges Lower, Weighed by Falling Commodity Prices
May 24, 2013
By David George-Cosh
TORONTO —The Canadian dollar ended the week slightly lower against the U.S. dollar, retracing some of its losses from earlier in the day when falling commodity prices weighed on the currency.
The U.S. dollar was at C$1.0323 Friday, from C$1.0302 late Thursday, according to data provider CQG.
The Canadian dollar was weighed down Friday by a dampened commodity market that pulled down several of its commodity currency peers. Liquidity eased off in mid-afternoon trading as investors prepared for the Memorial Day long weekend break.
It’s been a rather volatile week for the Canadian dollar. The loonie moved to a 11-month low Wednesday after Federal Reserve Chairman Ben Bernanke was peceived as hinting the central bank’s monetary stimulus program may be winding down in the next few months.
The Canadian dollar regained some ground after investors realized the Fed would likely remain accommodative for the foreseeable future, but expectations are that the currency will continue to weaken.
“We’re going to see a lot more volatility. I think [this week] was a sign of things to come,” said Mark Frey, vice president and chief market strategist at Cambridge Mercantile Group. “I think we’re going to see a sustained push up to C$1.04 in the next week or soon thereafter.”
There were no Canadian data releases on Friday, and the Canadian dollar mostly ignored a better-than-expected reading of U.S. durable-goods orders for April.
The Bank of Canada will announce its overnight policy rate on Wednesday and gross domestic product figures for the first quarter of the year will come out on Friday.