Canadian dollar, 'stuck in a range,' clings to weekly gain

Fergal Smith
·2 min read
FILE PHOTO: A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto

By Fergal Smith

TORONTO (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Friday, holding on to this week's rally as it kept to a narrow trading range with U.S. markets closed in observance of Independence Day.

The loonie was trading nearly unchanged at 1.3564 to the greenback, or 73.72 U.S. cents. It traded in a range of 1.3553 to 1.3580. For the week, it was up 0.9%.

"The CAD appears to be stuck in a range ... in the absence of any major domestic developments," strategists at Scotiabank, including Shaun Osborne, said in a note.

It is "supported near 1.37 but better offered near 1.35," the strategists said.

The loonie has been supported this week by evidence the economy is recovering from the coronavirus crisis, including data on Thursday showing that exports climbed 6.7% in May.

But investors are wary of a surge of new coronavirus infections that has prompted U.S. states to delay and in some cases reverse plans to let stores reopen and activities resume.

Canada sends about 75% of its exports to the United States, including oil.

U.S. crude prices were down 0.8% at $40.32 a barrel as the resurgence of coronavirus cases raised concern fuel demand growth could stall.

Canadian Prime Minister Justin Trudeau said he was still unsure whether he would go to Washington D.C. next week to celebrate a new North American trade treaty, citing concern about possible U.S. tariffs on aluminum.

Ottawa will present an economic and fiscal snapshot next week, while Canada's employment report for June is due and the Bank of Canada will release its Business Outlook Survey.

Canadian government bond yields were mixed across a flatter curve, with the 10-year little changed at 0.560%.

(Reporting by Fergal Smith; Editing by Chizu Nomiyama and Chris Reese)