CANADA FX DEBT-C$ tracks euro down as growth worries weigh
* C$ ends at C$0.9687 vs US$, or $1.0323
* C$ finishes week down 0.2 percent
* C$ hit 6-week low at C$0.9745 per US$, or $1.0262
* Bond prices firm on flight to safety (Updates to close, adds details, commentary)
By Claire Sibonney
TORONTO, May 13 (Reuters) - Canada's dollar hit its weakest level against the greenback in more than six weeks on Friday, driven lower by a broad rally in the safe-haven greenback and a selloff in the euro as worries about global growth mounted.
The euro, a recent barometer of risk appetite, tumbled against the U.S. dollar after European Central Bank President Jean-Claude Trichet spooked investors ahead of a Monday meeting of Eurogroup finance officials. [FRX/]
In an interview on Spanish television, Trichet said that euro zone inflation was at a peak and the central bank would do everything necessary to deliver price stability.
"This week one of the focuses has been the trajectory of global growth softening a little bit," said Camilla Sutton, chief currency strategist at Scotia Capital.
Data on Friday showed the German and French economies propelled growth in the euro zone well above forecasts in the first quarter while also highlighting the yawning gap between the bloc's strong and weak members. [ID:nLDE74C0FI]
"Even though we had fabulous growth data from the euro zone, the market just focused on the divergence between core Europe growth and periphery European growth," Sutton said .
The Canadian dollar CAD=D4 ended the North American session at C$0.9687 to the U.S. dollar, or $1.0323, down from Thursday's close at C$0.9623 to the U.S. dollar, or $1.0395. The currency ended the week 0.2 percent lower.
Earlier in the day, the Canadian dollar broke through a key technical support level around C$0.9720 and fell as low as C$0.9745 versus the greenback, or $1.0262, its weakest level since March 30.
Sutton said the next support level for the currency is the 100-day moving average around C$0.9780.
Helping to contain the losses for the commodity-linked currency, oil prices rose in late short-covering, after a volatile session whipsawed by the European economic concerns and news that Libyan leader Libyan leader Muammar Gaddafi may have been wounded. [O/R]
Sliding stock markets reflected the general risk-off mood in currency markets. [.N] [.TO] [ID:nN13253808]
Shaun Osborne, chief currency strategist at TD Securities, said risk appetite will likely continue to drive the currency in the near term.
"We're still in an environment where, fundamentally, the Canadian dollar can probably outperform on the crosses because the situation here in Canada is still quite constructive," he said.
"The data has been giving us some positive surprises. We know the economy is doing quite well, we expect the Bank of Canada to tighten down the road, but a lot of those factors I think are priced in here.
Canadian bond prices firmed, tracking the rise in their U.S. counterpart, helped by stock losses, the U.S. Federal Reserve Treasury purchases and relief that U.S. inflation didn't come in above forecast. [US/]
They underperformed Treasuries across much of the curve however.
Canada's two-year bond CA2YT=RR was up 3 Canadian cents to yield 1.691 percent, while the 10-year bond CA10YT=RR gained 28 Canadian cents to yield 3.204 percent. The 30-year bond CA30YT=RR advanced 68 Canadian cents to yield 3.590 percent. (Editing by Rob Wilson)
© Thomson Reuters 2017 All rights reserved.