Weak oil prices weigh on loonie rally
2024-05-13
Summary:
The Canadian dollar slipped Monday after a modest weekly gain. Strong Canadian job data and weak US numbers boosted the loonie.
The Canadian dollar dipped on Monday following a modest weekly gain. A stronger-than-expected jobs report in Canada and a surprisingly weak one in the US helped push loonie higher.
Canada's economy added 90,400 jobs in April, five times the number that was forecast. Money markets see a 44% chance of an interest rate cut by the BOC in June, down from nearly 60% previously.
Investors also weighed readings from the University of Michigan's survey of consumer sentiment which showed year-ahead inflation expectations of 3.5% in May, the highest level since November.
Oil prices extended declines amid signs of weak fuel demand. Still, the market remained underpinned by views that the OPEC+ could extend supply cuts in to the second half of the year.
Crude inventories fell by 1.4 million barrels in the week ending 3 May, the EIA said, compared with analysts' expectations in a poll for a decline of 1.1 million barrels.
OPEC will stop publishing a calculation of the world's demand for its own crude in its monthly oil report, two sources close to the matter said, focusing instead on forecasts for demand for OPEC+'s oil.
The Canadian dollar is hold above its 50 SMA which serves to rein in selling. A push above 1.3730 is need to signal a more bullish bias.
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