3 Min Read
* Canadian dollar at C$1.0983 or 91.05 U.S. cents * Loonie gains 0.5 pct on week; touches four-week high * Bond prices mixed across the maturity curve By Leah Schnurr and Alastair Sharp TORONTO, Feb 14 (Reuters) - The Canadian dollar pulled back slightly against the greenback on Friday, breaking a recent string of modest gains in which it had bounced up from last month's 4-1/2 year lows. The loonie had a firmer tone after data overseas showed growth in the euro zone economy picked up more than analysts were expecting. But at home data showed manufacturing sales dropped unexpectedly in December, halting the Canadian dollar's early gains. With upcoming domestic data expected to provide further evidence of slow growth and stagnant inflation, the currency's upswing is likely to peter out, said Shaun Osborne, chief currency strategist at TD Securities. "I don't think that anyone is outright bullish on the Canadian dollar here," he said. "(The data) does point to maybe more softness in the early part of next week before we start to think seriously about the retail sales and CPI numbers" later in the week, which Osborne said could be weak. The Canadian dollar ended the North American session at C$1.0983 to the greenback, or 91.05 U.S. cents, weaker than Thursday's close of C$1.0977, or 91.10 U.S. cents. The currency earlier hit C$1.0940, its highest level in nearly four weeks. It ended up gaining 0.5 percent on the week. After a sharp selloff in January, the Canadian dollar has managed to regain about 1.5 percent since the start of February with investors viewing the speed of its decline at the start of the year as having been overdone. Still, the fundamentals that drove the loonie lower remain in place, particularly the Bank of Canada's expressed concern about weak inflation and the likelihood that the bank will keep interest rates low for some time. Most analysts expect more downside for the loonie. "We still think the medium-term trend over the next few months is a weaker Canadian dollar," said Benjamin Reitzes, senior economist at BMO Capital Markets in Toronto. Canadian government bond prices were mixed across the maturity curve, with the two-year up 1 Canadian cent to yield 1.014 percent, and the benchmark 10-year down 5 Canadian cents to yield 2.467 percent.