C$ strengthens to new 12-week high against weaker greenback

Thu Mar 3, 2016 4:40pm EST
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By Fergal Smith

TORONTO (Reuters) - The Canadian dollar strengthened to a 12-week high against its U.S. counterpart on Thursday as base and precious metal prices rallied, although it underperformed other commodity-related and European currencies.

The currency extended its recovery from a 12-year low in January at $1.4689 as weaker U.S. data weighed on the greenback ahead of Friday's U.S. jobs report. .DXY

"The U.S. economy is growing but not quite at the trajectory that the Fed and other market participants are hoping for," said Lennon Sweeting, a foreign exchange dealer at USForex.

The U.S. service sector expanded in February at a slightly slower pace than the previous month and employment in the sector declined for the first time in two years.

"The market is starting to realize that the greenback is pretty significantly overpriced given that a rate hike isn't looking as likely," Sweeting added.

Recent strength in commodity markets helped support Canada's commodity-linked currency.

U.S. crude CLc1 prices ended a three-day rally, settling slightly lower at $34.57 a barrel. [O/R]

Copper prices hit their highest in more than three months, while gold climbed to a nearly 13-month high.   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