Canada dollar hits one-month high, ekes gain before jobs data

Thu Dec 6, 2012 4:40pm EST
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By Solarina Ho

TORONTO (Reuters) - The Canadian dollar finished modestly firmer against the U.S. dollar on Thursday, paring gains after briefly touching a one-month high, as investors turned their attention to employment data from Canada and the United States expected on Friday.

The currency crept to its strongest level since early November in late morning trade, extending gains made over the last two days after the Bank of Canada kept its bias towards future rate hikes earlier in the week.

Canada's central bank was unwavering in its view that it may need to raise interest rates, not cut them, even as the country's economy shows signs of slowing.

The slowing growth was reaffirmed after data showed purchasing activity in Canada fell in November and building permits data showed the value of residential permits -- a steadier measure than non-residential permits -- fell for the third time in four months.

The Canadian dollar finished the North American session at C$0.9911, or $1.0090 U.S. cents, slightly stronger than Wednesday's session close of C$0.9917, or $1.0084.

The currency, which has been trading between C$0.9962 and 0.9906 for the last two weeks, briefly broke through C$0.9900. It touched C$0.9892 vs the U.S. dollar, or $1.0318, its strongest level since November 7.

"Overall, it still feels like the market is unsure in which direction to take USD/CAD," said Gareth Sylvester, director at Klarity FX.

The Canadian dollar's performance was mixed against a basket of other major currencies. It underperformed its fellow commodities-linked Australian and New Zealand dollars, but outperformed the euro, where it hit its strongest level in more than a week.   Continued...