Canadian dollar ends higher as greenback falters

Mon Jun 16, 2008 4:45pm EDT
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By Frank Pingue

TORONTO (Reuters) - The Canadian dollar rebounded and closed higher against the U.S. dollar on Monday, recouping all its losses from the previous session as weak economic data out of the United States rattled the greenback.

Domestic bond prices finished higher across the curve and reclaimed some of the steep losses suffered last week as the U.S. data boosted investor appetite for more secure assets like government debt.

The Canadian dollar closed at C$1.0225 to the U.S. dollar, or 97.80 U.S. cents, up from C$1.0292 to the U.S. dollar, or 97.16 U.S. cents, at Friday's close.

Oil prices climbed to a record high near $140 a barrel but ultimately retreated to settle lower on the day and did not help boost the commodity-linked Canadian dollar.

Instead, the currency's rise was more a result of a weak greenback, which stumbled as U.S. data raised doubts the Federal Reserve would soon hike interest rates.

"Overall, I think the big story today was just a pullback in the U.S. dollar," said Doug Porter, deputy chief economist at BMO Capital Markets.

With no domestic data to influence direction, the Canadian dollar spent the North American session in a range of C$1.0197 to C$1.0286 to the U.S. dollar, or 98.07 to 97.22 U.S. cents.

Key events in Canada that will be watched closely by market participants are Thursday's May consumer price index data and Bank of Canada Governor Mark Carney's speech in Calgary.   Continued...