UPDATE 1-Canadian dlr erases overnight drop after U.S. data
By Frank Pingue
TORONTO, March 24 (Reuters) - The Canadian dollar shot higher versus the U.S. dollar and moved comfortably off the two-month low it hit overnight as data from the United States generated optimism about the U.S. economy.
At 11:15 a.m. (1515 GMT), the Canadian unit was at C$1.0207 to the U.S. dollar, or 97.97 U.S. cents, up from its overnight low of C$1.0309 to the U.S. dollar, or 97.00 U.S. cents, which marked its lowest level since Jan. 23.
The currency's surge, which follows its 3.6 percent slide last week, came in one swift move after U.S. data showed existing home sales for February were better than expected.
That sent the Canadian currency as high as C$1.0156 to the U.S. dollar, or 98.46 U.S. cents, before backing off slightly.
"The home sales number gave the market some glimmer of hope that maybe things are starting to look better," said Steve Butler, director of foreign exchange trading at Scotia Capital. "And certainly the Canadian dollar had a rough end of the week last week so it's taking back a bit of lost ground."
The Canadian dollar's freefall last week was pegged to a combination of weak commodity prices and a strong greenback. The decline was exaggerated by thin trading heading into the extended Easter holiday weekend.
Butler said it was premature to suggest the U.S. data would signal a turnaround in the U.S. economy, but he felt it would be enough to keep the currency propped higher for the rest of the North American session.
U.S. data showed home sales rose 2.9 percent last month, breaking a six-month streak of decreasing home sales and sparking a rally in North American stock markets and in the Canadian dollar.
Canada relies on the United States for consuming the bulk of its exports, so its currency is often influenced by data that offers insight into the health of the U.S. economy.
The Canadian economic calendar is empty until Tuesday's January retail sales data, which is expected to show a 1.2 percent rise in sales after a 0.6 percent climb in December. (Editing by Bernadette Baum)
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