WSJ: Canadian Dollar Modestly Lower, But Benefitting From US Ties
TORONTO (Dow Jones)-- The Canadian dollar was trading modestly lower against its U.S. rival early Monday, outperforming some commodity-linked peers, helped by Friday's positive U.S. jobs news.
The Canadian dollar appears "better placed in the near term," BNP Paribas said in a note early Monday, benefiting from its close ties to an increasingly better-looking U.S. economy.
The U.S. dollar was at C$0.9933 Monday morning, from C$0.9906 late Friday, according to data provider CQG.
The loonie was trading lower against the euro and the Japanese yen, but was outperforming commodity-linked peers from Australia and New Zealand.
Better U.S. data, including Friday's better-than-expected nonfarm payrolls report, was seen helping the loonie stem its losses -- with good U.S. economic news perceived as good for its biggest trading partner.
Canadian dollar sentiment has remained relatively resilient in recent days, said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto, citing the latest glimpse into the positions of speculative investors trading on the Chicago Mercantile Exchange.
The Commodity Futures Trading Commission's weekly report on the commitments of traders, released Friday, showed an increase of participants who are taking long positions on the Canadian dollar. The data is considered representative of hedge funds' trades, which is a slender, but telling, slice of the total foreign-exchange market.
Sutton said recent news on mergers and acquisitions have also bolstered investor sentiment for the Canadian dollar, with a series of deals announced last week and both Glencore and Cargill now reportedly expressing interest in buying Canadian agribusiness giant Viterra.
The Australian and New Zealand dollars, meanwhile, were both under pressure early Monday, with each recently trading about 0.8% lower on the day against the greenback, after China announced massive $31.5 billion trade deficit, its largest in years.
The euro early Monday was trading flat against the U.S. dollar, and has climbed about 0.25% against the Canadian unit.
On Friday, about 85% of creditors agreed to a restructuring of about EUR200 billion worth of Greek debt, paving the way for a second Greek bailout. While the euro has regained some footing in the market, investors remain tentative about what lies ahead in the crisis.
