Loonie edges up from 7-week low in thin trade

Thu Nov 24, 2011 5:06pm EST
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By Jennifer Kwan

TORONTO (Reuters) - The Canadian dollar ticked higher against the greenback on Thursday in holiday-thinned trade but didn't stray far from the seven-week low it hit the day before on fears the euro zone crisis was spreading to Germany.

A meeting of the leaders of Germany, France and Italy on Thursday failed to provide relief from the jolt that rattled the market on Wednesday when a weak German government bond auction fueled fears that even the safe-haven status of Europe's biggest economy could be under threat.

"I don't think the market got any warm, fuzzy feelings about the possibility of a quick resolution to all the debt woes in Europe," said Steve Butler, director of foreign exchange trading at Scotia Capital.

The Canadian currency touched a low of C$1.0493 to the U.S. dollar, or 95.30 U.S. cents, which was below its Wednesday close of C$1.0485 against the greenback, or 95.37 U.S. cents.

But by the close on Thursday the Canadian dollar had worked its way up to C$1.0469, or 95.52 U.S. cents, in trading made thin by the U.S. Thanksgiving Day holiday.

"Every time we see Canada weaken off we seem to find some levels where there's reasonably good supply. We haven't been able to crack this C$1.05 level," Butler said.

"Anybody who's been long U.S. dollars going into this holiday weekend was probably a little quick to take some profits off the table."

The euro also fell to a seven-week low against the greenback on Thursday after German Chancellor Angela Merkel said she still does not think common euro zone bonds are necessary.   Continued...