Daily Afternoon Report 29.05.2017

The Canadian dollar was a touch lower against its U.S. counterpart on Monday as trade volumes remained thin with financial markets in the U.S. closed for the Memorial Day holiday.

USD/CAD edged up to 1.3451 by 09.27 ET and was trading in a range of 1.3433 to 1.3465.

The loonie struggled to make headway as oil prices drifted lower amid persistent concerns that rising U.S. shale output is threatening to derail efforts by other major producers to reduce a global supply glut.

Oil is one of Canada’s major exports.

The greenback was little changed against a basket of the other major currencies, holding above last week’s six-and-a-half month lows.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 97.34, holding above last week’s low of 96.79, its weakest level since November 9.

Investors remained in a cautious mood amid ongoing political concerns surrounding the Trump administration.

President Donald Trump attacked the media and dismissed White House leaks as “fake news” on Sunday, following reports that Jared Kushner, his son-in-law and senior aide, sought to set up secret “back channel” communications with Russia before Trump took office.

Investors were looking ahead to Friday’s U.S. employment report, which was expected to show that conditions in the labor market remain solid.

A strong U.S. jobs report would cement expectations for a rate hike by the Federal Reserve at its next meeting in June.

Data on Friday showed that the U.S. economy slowed less than initially thought in the first three months of the year. Gross domestic product grew at an annual rate of 1.2% in the three months to March, the Commerce Department said, up from an initial estimate of 0.7%.

It was still the weakest expansion since the first quarter of 2016, but economists think growth is likely to rebound sharply in the current quarter.