Investing.com - The U.S. dollar ended little changed against the Canadian dollar on Friday as higher oil prices boosted the loonie, while data showing the U.S. economy expanded modestly in the last quarter of 2014 underpinned demand for the greenback.
USD/CAD was almost unchanged for the day at 1.2513 in late trade and ended the week 0.17% lower.
The Commerce Department reported that U.S. gross domestic product grew at an annual rate of 2.2% in the last three months of 2014, down from an initial estimate of 2.6% but ahead of expectations for a downward revision to 2.1% growth.
Other reports showed that U.S. pending home sales rose to a one-and-a-half year high in January and consumer sentiment remained strong last month.
The February reading of the University of Michigan\'s consumer sentiment index was revised up to 95.4 from the preliminary reading of 93.6. While this was down from the previous month final reading of 98.1, it was the second highest level since January 2007.
The Canadian dollar found support as oil prices rallied on Friday amid speculation productions cuts by drillers in the U.S and global oil companies will alleviate a glut in supplies.
Canada is a major exporter of oil and its currency is very sensitive to fluctuations in oil prices.
The Canadian dollar also remained supported after data on Thursday showing that domestic inflation slowed less than expected in January added to the view that the Bank of Canada may not cut rates at its upcoming meeting.
The annual rate of inflation slowed to 1.0% from 1.5% in December compared to forecasts for a decline to 0.7% as gasoline prices tumbled. Core inflation, which strips out fuel costs, was steady at 2.2%, unchanged from the previous month.
Earlier in the week, BoC Governor Stephen Poloz said the January rate cut had bought the central bank some time to see how the economy would respond to the falling price of oil.
The BoC unexpectedly lowered its key rate to 0.75% last month.
In the week ahead, Friday’s U.S. employment report will be closely watched, while Wednesday’s rate review by the BoC will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 2
In the U.S., the Institute of Supply Management is to report on manufacturing activity.
Tuesday, March 3
Canada is to release the monthly report on gross domestic product.
Wednesday, March 4
The BoC is to announce its benchmark interest rate and publish its rate statement.
The U.S. is to release the ADP non-farm payrolls report, while looks at private sector jobs growth. Later in the day, the ISM is to report on services sector activity.
Thursday, March 5
The U.S. is to release the weekly report on initial jobless claims and data on factory orders.
Canada is to publish its Ivey PMI.
Friday, March 6
Both the U.S. and Canada are to release trade data and Canada is also to report on building permits.
The U.S. is to round up the week with the closely watched government report on nonfarm payrolls, the unemployment rate and average earnings.