C$ ends flat as profit-taking cuts gains

Fri Oct 7, 2011 4:32pm EDT
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By Andrea Hopkins

TORONTO (Reuters) - The Canadian dollar ended little changed against its U.S. counterpart on Friday, capping a volatile week that saw it hit 13-month lows before regaining some strength as the economic backdrop improved.

North American stock markets and commodity-linked currencies had a see-saw day after stronger-than-expected U.S. jobs data suggested Canada's largest trading partner had likely skirted recession despite the summer slowdown.

While stronger than expected employment data in both Canada and the United States buoyed risk appetite in early trade, sending the Canadian dollar higher alongside stocks, the currency later softened as investors went into a long weekend in Canada with a cautious eye on the persisting debt woes in Europe.

"Everything was looking quite rosy early on, and then evidently some profit-taking came in late in the day and no one wanted to go home with risk assets on the books," said Blake Jespersen, director of foreign exchange sales at BMO Capital Markets.

"What that says to us is markets are still not believing in this rally, and as such decided to take profit before the long weekend."

The Canadian dollar ended the North American session at C$1.0383 to the U.S. dollar, or 96.31 U.S. cents, barely changed from Thursday's North American session close at C$1.0378 to the U.S. dollar, or 96.36 U.S. cents.

It was down about 1.2 percent on the week, but well off the 13-month low of C$1.0658 it hit on Tuesday.

Still, analysts said the Canadian dollar is likely to weaken again in the days ahead as Europe's sovereign debt crisis persists and concern about the impact of the crisis on the global economy weighs on commodities and risk appetite.   Continued...

<p>Canadian loonies, one dollar coins, are displayed in this posed photograph in Toronto, October 10, 2008. REUTERS/Mark Blinch</p>