Lacking positive catalysts, the CAD falls for sixth week

By Fergal Smith

TORONTO (Reuters) - The Canadian dollar weakened to a near three-month low against its U.S. counterpart on Friday as investors struggled to find positive factors to bolster the currency in the face of broad-based gains for the greenback.

The loonie was trading 0.3% lower at 1.3615 to the greenback, or 73.45 U.S. cents, after touching its weakest intraday level since May 31 at 1.3639.

For the week, the currency was down 0.5%, its sixth straight week of declines and the longest weekly losing streak since May 2022.

"Canada doesn't have that much working in its favor," said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC. "Oil has come off of its (recent) highs, U.S. rates are rising. The stock market is up a little bit today but the real story is its recent pullback."

Adding to pressure on the Canadian dollar was recent strength for the U.S. dollar. The greenback rose on Friday against a basket of major currencies after Federal Reserve Chair Jerome Powell said the Fed may need to raise interest rates further to ensure inflation is contained.

"In the big picture, there are two things driving the markets. One is the Fed and higher U.S. interest rates and the other is concern about growth coming out of China," Chandler said.

Canada is a major producer of commodities, including oil, so the loonie is sensitive to global economic prospects. The price of oil seesawed around $79 a barrel, at nearly its lowest level in one month.

Domestic data was a bright spot, with a preliminary estimate showing wholesale trade up 1.4% in July from June.

The Canadian 10-year yield was little changed at about 3.69%, after pulling back from a 15-year high last week at 3.828%.

(Reporting by Fergal Smith; Editing by Alistair Bell)