CANADA FX DEBT-C$ ends lower as rally stalls, up 2.7 pct on week

Fri Mar 20, 2009 4:54pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* Canadian dollar pulls back with equity drop

* Commodity-linked currency makes weekly gain of 2.7 pct

* Bonds falter on extended profit-taking (Updates to close)

By Ka Yan Ng

TORONTO, March 20 (Reuters) - The Canadian dollar retreated from early gains on Friday as stock markets fell and commodity prices softened, ending a three-day rally spurred largely by the U.S. Federal Reserve's plan to buy up government bonds.

The currency finished at C$1.2395 to the U.S. dollar, or 80.68 U.S. cents, down from C$1.2377 to the U.S. dollar, or 80.80 U.S. cents, at Thursday's close.

Despite the pullback on Friday, the Canadian dollar scored solid gains for the week, up 2.7 percent, mostly stemming from the aftermath of the U.S. central bank's announcement that it plans to purchase some $1 trillion of government and mortgage-backed debt.

But Toronto's main stock index ended an eight-day string of higher closes on Friday. The Canadian dollar's moves have recently been closely linked to the commodity-rich index.

"It's ending the week on a softer tone given the return of risk aversion with equities selling off," said Sal Guatieri, senior economist at BMO Capital Markets.   Continued...