Canadian stronger in thin markets on Europe optimism
By Andrea Hopkins
TORONTO (Reuters) - The Canadian dollar strengthened in thin trade on Friday as investors headed back to riskier assets, hopeful that leadership change will put Italy back on the path to fiscal health and avoid a full-blown euro zone crisis.
Global equities surged more than 2 percent and the euro rallied against the dollar after an Italian vote on economic reforms eased fears that its debt burden would jeopardize the euro zone's future.
The Canadian dollar climbed more than a cent in the risk-on trade, hitting a session high C$1.0107 to the U.S. dollar, or 98.94 U.S. cents, before settling back slightly.
"It looks like the recent political moves in Europe have boosted risk sentiment slightly, but I think what you're seeing are moves in a very thin market," said John Curran, senior vice president at CanadianForex, a commercial foreign exchange dealing firm.
"People are just squaring things up going into this weekend. There's a lot of event risk in the next couple of days."
Canadian bond markets were closed for the Remembrance Day holiday.
At 4 p.m. (2100 GMT), the Canadian dollar was at C$1.0112, or 98.89 U.S. cents, according to Thomson Reuters data, well above Thursday's Bank of Canada close at C$1.0177 to the U.S. dollar, or 98.26 U.S. cents.
It had weakened as far as C$1.0232 to the U.S. dollar, or 97.73 U.S. cents, overnight, before strengthening on the risk-on sentiment in the wake of the approval of austerity measures by Italy's Senate. Continued...