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Canadian Dollar Ends Higher After Some Supportive DataFriday, May 30, 2014 > 10:46:33
(Wall Street Journal) by Don Curren
TORONTO--The Canadian dollar ended higher Thursday, taking advantage of broad weakness in the U.S. dollar and some positive domestic data to push toward the higher end of its recent trading envelope.
The U.S. dollar is at C$1.0837 Thursday from C$1.0878 late Wednesday, according to data provider CQG.
Its session low of C$1.0826 marked its lowest point since May 9.
Statistics Canada reported Thursday that the current account deficit in the January through March period was the slimmest since the fourth quarter of 2011, which helped the trade balance record its first surplus in more than two years.
The deficit narrowed to 12.39 billion Canadian dollars ($11.39 billion) from a revised C$15.64 billion in the fourth quarter of 2013. It was smaller than the C$13 billion consensus call in a report from Royal Bank of Canada.
That result was a positive for the Canadian dollar, said Vassili Serebriakov, currency strategist at BNP Paribas in New York. "The current account was a little on firmer side of expectations. I think that helped," he said.
Emerging market and commodity-sensitive currencies typically do well when U.S. bond yields are heading lower, he said.
While that yield moved a little higher Thursday, it slumped sharply lower earlier in the week, he said.
Mr. Serebriakov said 10-year yields appear to be close to bottoming, which will tend to curb any further show of strength in the Canadian dollar.
U.S. data has tended to shift to the stronger side recently, another factor which could help curtail Canadian dollar strength.
StatsCan also reported average weekly earnings of Canadian non-farm payroll employees increased 0.7% on a monthly basis to 932.69 Canadian dollars ($857.65) in March, and was up 3.1% year-on-year. Total non-farm employment declined by 45,300 following a 24,200 drop the previous month.
Mr. Serebriakov said the Canadian dollar may also benefit somewhat as investors who were bearish on the currency, but have since shifted their stance, trim their short positions in it.