Dollar skids to snap 4 days of gains, but up on week

Fri Mar 2, 2012 4:36pm EST
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By Jennifer Kwan

TORONTO (Reuters) - The Canadian dollar retreated against its U.S. counterpart on Friday after touching a year-high this week, as the greenback climbed broadly amid a risk-off tone in global markets.

The euro fell against the U.S. dollar on revived worries about Europe's fiscal stability, while oil prices sank after touching 3-1/2 year highs and the stronger greenback weighed on gold prices.

"Equities are lower; commodities are lower, led by crude oil being down by two bucks. That, combined with the broader base U.S. dollar bid, has contained the dollar/Canada move today and positions are being squared against the weekend," said Jack Spitz, managing director of foreign exchange at National Bank Financial.

The Canadian dollar ended at C$0.9886 versus the U.S. dollar, or $1.0115, down from Thursday's North American finish at C$0.9859 versus the U.S. dollar, or $1.0143.

The only key economic data point of note for Canada was fourth-quarter growth data, but that failed to push the currency significantly in either direction, market observers said.

Canadian economic data showed growth had fallen to an annualized 1.8 percent in the fourth quarter from an upwardly revised 4.2 percent in the third, leaving the Bank of Canada with room to keep interest rates at historic lows.

The growth rate was exactly as expected in a Reuters survey of analysts but fell short of the 2.0 percent the Bank of Canada had predicted in its January Monetary Policy Report.

"The GDP showed softer growth in Canada and the data was not sufficient to break the bias for a U.S. dollar bid or take the Canadian dollar out of its consolidated trading range," said Spitz, referring to levels of C$0.9850 to C$0.9900 against the greenback.   Continued...