By Fergal Smith
TORONTO (Reuters) – The Canadian dollar strengthened on Friday against its U.S. counterpart, adding to this week’s gains as oil recovered some lost ground, while data showed that bearish bets on the loonie rose to a fresh record high.
U.S. crude CLc1 prices settled 90 cents higher at $49.80 a barrel. They had plunged on Thursday following an Organization of the Petroleum Exporting Countries-led decision to extend current production curbs that investors gauged did not go far enough to reduce a global supply glut. [O/R]
“It’s all about oil,” said Michael Goshko, Corporate Risk Manager at Western Union Business Solutions.
Oil is one of Canada’s major exports.
Speculators increased net short positions in the Canadian dollar to 99,109 contracts as of May 23 from 98,000 a week earlier, data from the Commodity Futures Trading Commission and Reuters calculations showed.
Those investors who had been selling the loonie “got squeezed big time,” Goshko said.
The currency got a boost on Wednesday when the Bank of Canada was more upbeat than investors had expected as it left interest rates unchanged at 0.5 percent.
At 4 p.m. EDT (2000 GMT), the Canadian dollar CAD=D4 was trading at C$1.3460 to the greenback, or 74.29 U.S. cents, up 0.2 percent. For the week, it rose 0.4 percent.
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