Canadian dollar rallies as BoJ stokes risk appetite, oil prices rise

Fri Jan 29, 2016 5:42pm EST
 
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By Fergal Smith

TORONTO (Reuters) - The Canadian dollar gained against a stronger U.S. counterpart on Friday after a Bank of Japan rate cut into negative territory boosted global asset markets, while oil rallied and data showed Canadian and U.S. growth in line with economists' expectations.

The Canadian dollar CAD=D4 settled at C$1.4006 to the greenback, or 71.40 U.S. cents, stronger than Thursday's official close of C$1.4048, or 71.18 U.S. cents.

It has made sharp gains since Jan. 20, when the currency hit its weakest since 2003 at C$1.4689.

"Another wild ride for dollar-Canada," said Jack Spitz, managing director of foreign exchange at National Bank Financial, who added a strong finish to the session bodes well for momentum.

"Canada has been a relative outperformer based predominantly on crude oil," he added.

Oil prices have rebounded more than 25 percent since hitting 12-year lows last week on prospects of a deal between major exporters to cut production and curb one of the biggest supply gluts in history. [O/R]

Canada's economy grew for the first time in three months in November, rising 0.3 percent.

The data supported a recovery in the Canadian dollar since the Bank of Canada surprised many traders last week and left its policy rate on hold at 0.50 percent.   Continued...

 
A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. REUTERS/Mark Blinch