Canadian dollar closes flat to end losing week

Fri May 2, 2008 4:55pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Frank Pingue

TORONTO May 2 (Reuters) - The Canadian dollar capped off its second straight losing week with a flat close against the U.S. dollar on Friday, torn between the boost from lofty oil prices and the drag from solid U.S. economic data.

Domestic bond prices, with no Canadian data to set a tone, followed the bigger U.S. Treasury market lower across the curve as investors charged into equity markets after the solid data.

The Canadian dollar closed at C$1.0193 to the U.S. dollar, or 98.11 U.S. cents, unchanged from its Thursday's close.

For the week, the Canadian currency fell 0.3 percent even though it rallied sharply on Wednesday -- hitting its highest level in a week -- after a U.S. Federal Reserve rate cut rattled the U.S. dollar and opened the door to a rally.

Early in Friday's session the Canadian dollar fell to C$1.0245 to the U.S. dollar, or 97.61 U.S. cents, its lowest level since April 14. But it crept back and broke even for the session due to the background of lofty oil prices.

The initial fall during the week's final session was due largely to a rally by the U.S. dollar, which rose on data suggesting the Fed may be able to end a rate-cutting campaign that removed 325 basis points from its key funds rate since September.

"The economic data in the U.S. was generally stronger than expected and that tempered concerns about the extent of the weakness in the U.S. economy and a sense that maybe the Fed can hold rates unchanged in the near term," said Paul Ferley, assistant chief economist at Royal Bank of Canada.

"So the greenback got support from sort of that view on monetary policy in the U.S., to the detriment of a number of other currencies including the Canadian dollar."   Continued...