C$ gains as stocks, commodities recover

Fri Jun 22, 2012 4:49pm EDT
 
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By Jennifer Kwan

TORONTO (Reuters) - The Canadian dollar eked out a small gain against its U.S. counterpart on Friday and outperformed its G10 currency peers, as equity and oil prices recovered after a sharp sell-off the day before on global economic growth fears.

Oil prices rebounded Friday from 18-month lows, while gold and base metals also eked out gains. <O/R> <GOL/> <MET/L>

"Commodity prices are a touch higher compared to where they were yesterday. It's helping the Canadian dollar today," said Charles St-Arnaud, an economist and currency strategist with Nomura Securities in New York.

"You had an outsized decline (Thursday) so it is more reversing (of) some of that," he said.

Surveys on Thursday showed business activity across the euro zone shrank for a fifth straight month in June and Chinese manufacturing contracted, while weaker overseas demand slowed U.S. factory growth. The data sent global equity and commodity markets sharply lower.

Investor sentiment was also supported on Friday as leaders of Germany, France, Italy and Spain agreed on a 130 billion euros (US$163 billion) package to revive growth in the region.

The Canadian currency ended the session at C$1.0246 to the greenback, or 97.60 U.S. cents, up from Thursday's North American session finish of C$1.0293, or 97.15 U.S. cents. It dipped 0.3 percent for the week.

Earlier in the day, the currency touched C$1.0301 versus the U.S. dollar, or 97.08 U.S. cents, its weakest since June 13, after domestic data showed Canada's annual inflation slowed more sharply than expected in May to 1.2 percent.   Continued...