Daily Afternoon Report 05.06.2017

The Canadian dollar edged lower against its U.S. counterpart on Monday as lower prices for oil, a major Canadian export, weighed.

USD/CAD was at 1.3496 by 09.46 ET, up from the day’s lows of 1.3462.

The loonie came under pressure as oil prices turned lower, giving up strong overnight gains amid fears that a diplomatic rift between Qatar and other Arab states could hamper a global deal to reduce oil production.

Gulf states cut diplomatic relations with Qatar on Monday, accusing it of supporting extremism and undermining regional stability.

Oil prices had initially jumped amid fears that the diplomatic spat could affect shipments.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.26% to 96.86.

The index hit a seven-month trough of 96.61 on Friday, the weakest level since the U.S. presidential election on November 8 after a disappointing employment report.

The U.S. economy added 138,000 jobs last month the Labor Department reported, falling far short of economists’ expectations for 185,000 new jobs.

Most analysts believe the poor data will not stop the Federal Reserve from raising interest rates at its meeting later this month, but most market participants now expect a more dovish path in the second half of the year.