The USD/CAD lost most of its weekly gain on Friday after opening at 1.2294 on Monday and reaching 1.2437 on Thursday.
The main economic event last week, the US Nonfarm Payrolls, managed a strong growth to relieve some economic worries but not dramatic enough to excite rate hike fears. Treasury rates fell across the board. Without the prospect, or at least hope, of higher US returns, the dollar fell to 1.2331 against the Canadian and lost ground in all major pairs.
Crude oil prices provided additional support for the Canadian dollar. West Texas Intermediate, (WTI) ended the week at $74.67, its highest close since October 3, 2018.Crude oil is near the top of its seven-year range and it is unclear if possible OPEC production cuts or more demonstrable global economic growth will push prices higher.
For the USD/CAD the prospect of higher US rates sometime in the fourth quarter or next year is a poor substitute for rising yields today. When stable or lower US returns are combined with strengthening crude prices, it is difficult for the US dollar to compete with the Canadian Dollar.
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