Canadian dollar benefits from strong oil, weak US$

Fri Jun 27, 2008 4:39pm EDT
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By John McCrank

TORONTO (Reuters) - The commodity-linked Canadian dollar closed higher against a sagging U.S. dollar on Friday, helped by a spike in oil prices to nearly $143 a barrel.

Canadian bond prices ended mixed as Canadian stocks rallied, hurting front end bond prices.

The Canadian dollar closed at C$1.0106 to the U.S. dollar, or 98.95 U.S. cents, up from C$1.0131 to the U.S. dollar, or 98.71 U.S. cents, at Thursday's close.

For the week, the Canadian dollar ended up 0.6 percent, extending its 1.2 percent gain from last week.

The currency rose as high as C$1.0050 in the morning, its firmest level since June 3, as oil prices surged, but gave back much of the gain as investors squared their books ahead of the month and quarter end.

"A bit of a topsy-turvy day," said Steve Butler, director of foreign exchange trading at Scotia Capital.

"People are looking at what's happening with oil and with gold, but a lot of that gets washed away with these month- and quarter-end flows," he said.

The price of U.S. crude oil futures hit a record $142.99 a barrel on Friday as commodities rallied in response to drops in many major equities markets.   Continued...