Canada dollar falls as oil prices ease, bonds drop

Fri Aug 22, 2008 4:29pm EDT
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* Turnaround in oil prices blamed for currency's slide

* Canadian dollar ends week with gain of 1 percent

* Bond prices drop alongside U.S. Treasury market

By Frank Pingue

TORONTO, Aug 22 (Reuters) - The Canadian dollar ended lower against the U.S. dollar on Friday, given a weaker commodity price backdrop, but the big gains it made on Thursday were enough to allow it to close higher for the week.

Domestic bond prices, with no economic data to trigger a move, finished lower across the curve alongside the bigger U.S. Treasury market as U.S. stocks rose sharply.

The Canadian dollar closed at C$1.0486 to the U.S. dollar, or 95.37 U.S. cents, down from C$1.0440 to the U.S. dollar, or 95.79 U.S. cents, at Thursday's close.

For the week, the currency rose 1 percent, thanks to Thursday's gain of more than 1 U.S. cent as oil prices rose while inflation data did little to support the idea of an interest rate cut by the Bank of Canada any time soon.

In the week's final session, the Canadian dollar was rattled by the sort of commodities pullback that tends to weigh on currencies of countries like Canada that are major exporters of oil and gold.   Continued...