The Canadian dollar edged lower against the U.S. dollar on Thursday even as oil prices held above $100 a barrel, with traders weighing renewed trade risks and awaiting U.S. inflation data that could shape the Federal Reserve's next move.
The U.S. dollar traded at about C$1.3808, leaving the loonie at roughly 72.42 U.S. cents. USD/CAD rose around 0.02% from Wednesday's close near C$1.3805, a modest decline for the Canadian currency.
Brent crude held above $100 a barrel, supported by escalating U.S.-Iran hostilities and concerns over disruptions to energy flows through the Middle East. Brent was recently around $102 a barrel, while U.S. crude traded near $97.
Higher oil prices typically support the commodity-linked Canadian dollar because energy exports are an important source of Canada's trade income. That support, however, was being offset by broader risk aversion and continued uncertainty over Canada-U.S. trade relations.
The loonie had weakened about 0.2% on Wednesday to C$1.3805 per U.S. dollar after trading as high as C$1.3767 earlier in the session. Yet the currency had benefited earlier in the week from rising oil prices and a weaker U.S. dollar.
Investors were also looking ahead to U.S. producer-price data and other inflation indicators for clues on the Federal Reserve's policy outlook. A renewed rise in energy prices has complicated the inflation picture by increasing the risk that higher fuel costs could keep price pressures elevated.
Source: Investing.com
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