Canadian dollar hits seven-and-half month low vs. euro; softer vs. dollar

Wed Dec 19, 2012 10:40am EST
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By Solarina Ho

TORONTO (Reuters) - The Canadian dollar was weaker against its U.S. counterpart on Wednesday, trending with other commodity currencies, as many investors looked to book profits ahead of the holidays following a recent rally to two-month highs.

Canada's dollar ran counter to world shares, which hit 17-month highs, and the surging euro. Investor hopes grew for a year-end budget deal in the United States and for further monetary stimulus from the Bank of Japan.

"I think this is probably some profit-taking heading into the holidays, because the market was quite short USD/CAD. Definitely some technical levels have broken on some of the Canada crosses ... It's had a very decent rally," said David Bradley, director of foreign exchange trading at Scotiabank.

"It's been really strange, the way its traded recently ... Most correlations have broken down."

At 9:07 a.m. (1407 GMT), the Canadian dollar stood at C$0.9873 versus the U.S. dollar, or $1.0129, weaker than Tuesday's North American finish at C$0.9857, or $1.0145.

Bradley said the currency's strength has stalled around the C$0.9825 level against the U.S. dollar, and noted a lot of interest to sell toward C$0.9882.

Against the euro, it fell to its lowest level since May 1 at C$1.3131, or .7616 euros.

The currency did not react to a smattering of North American data, including Canadian wholesale trade, which expanded by a stronger-than-expected 0.9 percent in October.   Continued...

A man holds the new Canadian 100 dollar bill made of polymer in Toronto November 14, 2011. REUTERS/Mark Blinch