C$ ends higher on risk-on sentiment, oil strength
By Andrea Hopkins
TORONTO (Reuters) - The Canadian dollar ended the day stronger against its U.S. counterpart on Thursday as the European Central Bank soothed fears of a banking crisis, sending investors back to riskier assets.
Global stocks rallied for a third straight day and oil prices surged after the ECB renewed offers to aid ailing regional banks. A lackluster U.S. jobs report that still managed to ease fears about a new recession also provided support.
The improved appetite for risk helped commodity-linked currencies including the Canadian dollar, though analysts said the positive sentiment may not last if the closely watched U.S. payroll report due on Friday is as gloomy as expected.
"We've had a good bounce in risk appetite and in equity markets heading into what is a long weekend for Canada and the U.S., and I suspect that given that two-day move upward, we may end up seeing a bit an unwinding of that," said Mark Chandler, head of Canadian fixed income and currency strategy at Royal Bank of Canada.
"We need to have very very good news to keep this in place for tomorrow."
The Canadian dollar ended the North American session at C$1.0378 to the U.S. dollar, or 96.36 U.S. cents, up from Wednesday's North American session close at C$1.0402 to the U.S. dollar, or 96.14 U.S. cents.
The currency at one point hit C$1.0371, its strongest level since September 30.
Chandler said rising oil prices have helped stem losses by the Canadian dollar, which sank through parity with the U.S. greenback in September and has mostly declined since amid persistent fear about Europe's debt crisis and global growth. Continued...