Canadian dollar ends down for third straight week

Fri Jan 18, 2008 4:34pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Frank Pingue

TORONTO (Reuters) - The Canadian dollar fell for the third straight week versus the U.S. dollar on Friday as concerns about what a slowdown in the United States could have on the domestic economy rattled the domestic currency.

Canadian bond prices finished mixed ahead of next week's widely expected Bank of Canada rate cut announcement and key economic data including the consumer price index report.

The Canadian dollar closed at 97.33 U.S. cents, valuing a U.S. dollar at C$1.0274, up slightly from 97.11 U.S. cents, or C$1.0298, at Thursday's close.

Despite the modest rebound, the currency ended the week down 0.7 percent.

Weighing down the Canadian dollar has been concerns about what impact a global slowdown could have on Canada given the nature of its exports, a weak string of economic data and lower commodity prices.

"Basically Canada needs to show it's almost perfect given the high run up in the currency last year," said Doug Porter, deputy chief economist at BMO Capital Markets. "That's a very tough position to maintain if your economic backdrop isn't air tight and we have seen some leaks this year in Canada's data."

So far this year, a slew of Canadian data has fallen short of estimates, including jobs and building permits data.

Porter suggested some traders may have felt the Canadian dollar was a bit oversold, which likely accounted for its higher finish to the week, but that it should not take away from the bigger trend for the currency this year.   Continued...