Canadian dollar holds 0.94 US
The Canadian dollar remained elevated against its US counterpart Friday, as a dearth of economic data from both countries amid the US Independence Day holiday kept trade volumes light.
The loonie, as Canada’s currency is known, advanced 0.05 percent to 0.9406 US. The loonie traded within a narrow range of 0.9391-0.9407 ahead of the North American session.
Canada’s currency has advanced 0.3 percent this week, as strong Chinese manufacturing data boosted global prospects and supported commodity-driven currencies. The markets sent the loonie to seven-month highs earlier this week despite disappointing Canadian GDP figures, which cast doubt about the pace of recovery in the second quarter.
Canada’s economy expanded just 0.1 percent in April, following a similar increase in March that capped off a subdued first quarter. Economists forecast monthly GDP to increase 0.2 percent.
The loonie could face considerable price action next week, as a steady stream of economic data could help boost the currency to new highs.
On Monday Statistics Canada will release data on building permits for the month of May. This gauge of future residential construction intentions provides insights about the state of the housing sector. Canadian building permits advanced 1.1 percent in April, StatsCan reported last month.
The Richard Ivey School of Business on Monday will release the Ivey purchasing managers’ index for the month of June. The seasonally adjusted PMI indicator is forecast to rise from 48.2 to 51.3 in June.
The Bank of Canada rounds out an active Monday session with the release of its quarterly business outlook survey, which provides short-term insights about the Canadian economy through the eyes of 100 business executives.
The Canadian Mortgage and Housing Corporation will report on housing starts Wednesday. Housing starts are forecast to have declined to a seasonally adjusted annual pace of 191,000 in June, after hitting a seven-month high of 198,324 the prior month.
StatsCan on Thursday will report on new house prices for the month of May. The new housing price index is forecast to rise 0.3 percent, following a gain of 0.2 percent the previous month.
The week’s biggest release will come Friday when StatsCan reports on Canadian employment. Canada’s economy is forecast to have added more than 26,000 jobs in June, following a gain of 25,800 the previous month. The unemployment rate is expected to remain unchanged at 7 percent.
Canada’s labour market has struggled with inconsistency since last summer. During that time, jobs growth has been negligible, according to StatsCan.
Upbeat economic data next week will help the Canadian dollar extend its recent gains, which could create fresh headaches for the BOC, which is counting on stronger exports to lift the Canadian economy.
The loonie is expected to strengthen over the short-term before falling back below 0.90 US cents at the end of the year, according to speculators.
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