Dollar ends slide with small gain

Thu Apr 10, 2008 5:23pm EDT
 
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By Frank Pingue

TORONTO (Reuters) - The Canadian dollar ended a four-session skid with a slight gain against the U.S. dollar on Thursday, but upbeat trade data and comments from the Bank of Canada could not lift the currency out of its range.

Bond prices gave back early gains to finish the session lower across the curve as investors extended their recent charge back into equity markets.

The Canadian dollar closed at C$1.0188 to the U.S. dollar, or 98.15 U.S. cents, up from C$1.0190 to the U.S. dollar, or 98.14 U.S. cents, at Wednesday's close.

Data released early in the session showed Canada's trade surplus soared 78 percent in February, and while that helped to reduce some of the near-term fears for the economy it was not enough to trigger a significant move by the currency.

Instead, the Canadian dollar spent the session in a range of C$1.0225, or 97.80 U.S. cents, and C$1.0163, or 98.40 U.S. cents, as investors were uneasy holding the currency at the lower end of the session range.

"We're just stuck in a range-trading scenario and it has caused people to reduce their focus on the Canadian dollar and follow and trade other currencies," said George Davis, chief technical strategist at RBC Capital Markets.

"It's made people a little tentative to get aggressively long dollar/Canada right now and as a result people are just stepping back for the time being."

Conditions seemed ideal for the Canadian dollar to break out of its range as commodity prices remained near lofty levels, equity markets rallied and domestic data was strong.   Continued...