Canadian dollar rallies on bullish U.S. data

Thu Nov 1, 2012 11:37am EDT
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By Claire Sibonney

TORONTO (Reuters) - Canada's dollar firmed versus the greenback on Thursday after data showed the pace of growth in the U.S. manufacturing sector picked up modestly in October, while consumer confidence rose to its highest level in more than four years.

The currency rallied to as high as C$0.9962 to the U.S. dollar, or $1.0038, from around C$0.9982, or $1.0018, immediately before the data releases.

It had already been reversing early losses on positive signs on the U.S. labor market a day before closely watched North American employment data is released.

"(The Canadian dollar) seems to be taking it relatively positively on the back of the significant uptick in risk sentiment, so equities are obviously rallying very strongly and the Canadian dollar is moving ... quite smartly," said Jeremy Stretch, head of currency strategy at CIBC World Markets in London.

The currency, which often tracks the direction of U.S. equities, followed Wall Street higher though U.S. market participation remained low as investors continued to deal with the aftermath of the massive storm Sandy. .N

At 11:05 a.m. (1505 GMT), the Canadian dollar was at C$0.9972, or $1.0028, compared with C$0.9990, or $1.0010, at Wednesday's North American close.

Stretch said that for the next 24 hours the currency was likely to hold between C$0.9930 and C$1.0020.

The currency felt some pressure after weak Canadian gross domestic product data in the previous session.   Continued...