Canadian dollar strengthens as crude oil prices surge
By Fergal Smith
TORONTO (Reuters) - The Canadian dollar rose against its U.S. counterpart on Friday as a surge in oil prices supported the risk-sensitive commodity currency, even as solid U.S. retail sales data helped drive broader gains for the greenback.
Relative calm returned to world markets after a week of turmoil that triggered a dash to safe-haven assets and currencies.
Feeding risk appetite, oil prices CLc1 surged as much as 12 percent on renewed talk of production cuts.
The rally in the Canadian dollar is "a function of what oil prices have done today," said David Tulk, chief Canada macro strategist at TD Securities, who views the rebound in oil as position-driven.
U.S. consumer spending appeared to have regained its momentum in January, supporting the possibility of Federal Reserve rate hikes this year and helping the U.S. dollar .DXY advance against a basket of major currencies.
On the other hand, U.S. consumer sentiment dipped in February. It suggests the full impact of stress on economic activity might not yet have been seen, said Tulk.
The Canadian dollar CAD=D4 ended at C$1.3861 to the greenback, or 72.14 U.S. cents, stronger than Thursday's official close of C$1.3921, or 71.83 U.S. cents.
The currency's strongest level of the session was C$1.3815, while its weakest was C$1.3965. For the week, it rose 0.3 percent. Continued...