US Markets

CANADA FX DEBT-Canadian dollar strengthens for 4th week as oil climbs

Credit: REUTERS/Mark Blinch

The Canadian dollar weakened against its U.S. counterpart on Friday but held on to most of this week's gains as oil prices rose and risk appetite increased.

(Adds details on activity, updates prices)

* Loonie touches its strongest level since July 6 at 1.2337

* Canadian wholesale trade increases 0.3% in August

* Price of U.S. oil settles 1.2% higher

* Canadian bond yields move higher across the curve

By Fergal Smith

TORONTO, Oct 15 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Friday but held on to most of this week's gains as oil prices rose and risk appetite increased.

The loonie was trading 0.2% lower at 1.2389 to the greenback, or 80.89 U.S. cents, after touching its strongest intraday level since July 6 at 1.2337.

For the week, the currency was up 0.6%, its fourth straight week of gains.

"The pro-risk mood is CAD-supportive alongside high energy prices," strategists at Scotiabank, including Shaun Osborne, said in a note.

Stocks rallied globally after a run of strong U.S. corporate earnings reports fueled optimism about the economy, though a seven-year-high for the price of oil, one of Canada's major exports, kept inflation risks alive and supported government bond yields.

U.S. crude oil futures settled 1.2% higher at $82.28 a barrel on forecasts of a supply deficit over the next few months as the easing of coronavirus-related travel restrictions spurs demand. [O/R]

Friday's decline for the loonie came as domestic data showed wholesale trade rising 0.3% in August from July, a smaller gain than analysts expected.

Separate data showed that Canadian home sales rose 0.9% in September from August after declining for five straight months.

Meanwhile, the U.S. dollar got a lift against a basket of major currencies as data showed U.S. retail sales climbing in September.

Canadian government bond yields were higher across the curve on Friday, tracking the move in U.S. Treasuries. The 10-year rose 4.1 basis points to 1.578% but held well below Tuesday's peak of 1.683%, which was the highest since January 2020. (Reporting by Fergal Smith; Editing by Alison Williams) ((fergal.smith@thomsonreuters.com; +1 647 480 7446;)) Keywords: CANADA FOREX/ (UPDATE 1)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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