Canadian dollar falters on reduced risk appetite
TORONTO (Reuters) - Canada's currency slipped from a three-week closing high on Thursday as lighter risk appetite was reflected in softer equity markets and commodity prices.
The Canadian dollar, without much domestic news to sustain influence, was likely to take direction from moves in other currencies, such as the euro that failed to cement a break above the key $1.50 level.
Market watchers were also considering a meeting of Asia-Pacific leaders and other Asian regional issues, including a visit to China next week by U.S. President Barack Obama.
The latest draft of a post-meeting communique from APEC finance ministers called for "market-oriented" exchange rates and interest rates -- effectively an argument for local currencies to appreciate against the U.S. dollar.
Gold prices eased from record highs as the U.S. dollar recovered, while oil prices were also lower ahead of a key U.S. crude stocks report. Both commodities are key Canadian exports and their prices often influence the direction of the Canadian dollar.
The lower commodity prices were likely to weigh on Toronto's main stock index, while retail giant Wal-Mart forecast earnings for the crucial holiday quarter could miss estimates as its customers face rising unemployment.
"Market attention seems to be diverted on two issues: comments out of the People's Bank of China...and gold, which continues to drive toward new highs," said Jack Spitz, managing director of foreign exchange at National Bank of Canada.
"As far as dollar/Canada is concerned, it's just following the broader flow in currency markets."
At 9:10 a.m. (1410 GMT), the Canadian dollar was at C$1.0495 to the U.S. dollar, or 95.28 U.S. cents, down from C$1.0461 to the U.S. dollar, or 95.59 U.S. cents, at Wednesday's close, its highest close since October 21. Continued...