Canadian dollar and business outlook

By Commodity News Service Canada

WINNIPEG, MB, May 31, 2016 (CNS Canada) The Canadian dollar weakened against its US counterpart on Monday, pressured by the anticipation that the Federal Reserve could raise interest rates.

A Fed official said on Monday that global markets are well-prepared for an interest rate hike this summer.

Unless US domestic data turns weaker, many analysts expect an interest rate raise this year, which is bearish for the Canadian currency.

At 8:45 a.m. CDT, the Canadian dollar was at US$0.7655 or C$1.3063 which compares with Monday’s North American close of US$0.7662, or C$1.3051.

Crude oil futures were stronger in early activity, but the expectation that Iran and Iraq will continue upping production, despite a producer meeting this week, pressured the commodity-linked Canadian dollar.

New York Mercantile crude oil futures had gained US$0.27 to sit at US$49.60 a barrel, as of 8:45 CDT.

In Canadian domestic data, expressed at an annualized rate, Canada’s GDP (Gross Domestic Product) rose 2.4 per cent in the first quarter, Statistics Canada said in a report on Tuesday.

The TSX was stronger in early activity, up 40.50 points at 8:45 a.m. CDT to sit at 14,127.17.