NEW YORK (Reuters) - The Canadian dollar was little changed against a broadly weaker U.S. dollar in thin trading on Friday, with prices alternating between gains and losses, as traders struggled to find near-term direction for the currency pair ahead of the weekend.
The Canadian currency earlier was pressured by lower crude oil prices in the face of mounting uncertainty about the recovery in energy demand as new coronavirus cases surged.
The Canadian dollar was an outlier in the commodity currency world, as the Australian and New Zealand dollars, as well as the Norwegian crown, gained versus the greenback even while oil prices slid.
In afternoon trading, the Canadian unit was flat at C$1.3571 per U.S. dollar CAD=D3. On the week, the Canadian dollar was up around 0.1%.
“I think the Canadian dollar is still in an uptrend vis-a-vis the U.S. dollar,” said Erik Bregar, head of FX strategy at Exchange Bank of Canada in Toronto. “We saw that solidified twice by the market failing to get above $1.37 in dollar/CAD.”
“If we get some kind of catalyst that moves August crude oil prices decisively above $41 per barrel, that could be the next positive catalyst for the Canadian dollar to push it below $1.35 versus the U.S. dollar,” he added.
Action Economics, in its daily blog, said the dollar/Canada pair has posted its narrowest intra-day trading band in weeks, amid generally stable oil prices and a “fairly neutral risk backdrop.”
Brent crude futures LCOc1 fell 0.5% to $43.14 per barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 slipped 0.3% to $40.63 per barrel. Oil prices weakened as the United States posted another surge in coronavirus cases.
The U.S. Centers for Disease Control and Prevention on Friday reported a total of 3,555,877 cases of new coronavirus infections, an increase of 72,045 cases from its previous count. The number of deaths rose by 926 to 137,864.
Canada reported 109,266 total cases and 8,827 deaths.
Canada’s deputy chief public health officer, Howard Njoo, said the daily case count rose to an average of 350 over the last week, up from 300 a day earlier in July.
In the bond market, Canadian government debt yields rose across the curve, with the two-year CA2YT=RR yield up at 0.282%, from 0.265% late on Thursday.
The benchmark Canadian 10-year yield rose to 0.529% CA10YT=RR from Thursday's 0.504%.
Reporting by Gertrude Chavez-Dreyfuss; Editing by Alistair Bell and Leslie Adler
Our Standards: The Thomson Reuters Trust Principles.