Dollar finishes slightly firmer, weak stocks weigh

Mon Jun 7, 2010 5:05pm EDT
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By Claire Sibonney

TORONTO (Reuters) - The Canadian dollar closed slightly firmer on Monday after a volatile session in which it took much of its direction from equity markets that clawed out modest gains before closing weaker.

Toronto's main stock index ended lower as falling energy, financial and tech shares weighed heavily on the market, reversing earlier gains built on a rally in gold stocks.

"A lot of it is just the equity market movements," said Sacha Tihanyi, currency strategist at Scotia Capital.

"With the lack of data today, it's kind of been that story and the story with the U.S. dollar."

The Canadian dollar closed the North American session at C$1.0602 to the U.S. dollar, or 94.32 U.S. cents, slightly firmer than Friday's finish at C$1.0607 to the U.S. dollar, or 94.28 U.S. cents.

Earlier it hit a session high of C$1.0516, or 95.09 U.S. cents, buoyed by equity market gains which helped it outperform against other major currencies, as well as some solid manufacturing data out of Germany.

Overnight the Canadian dollar had weakened to C$1.0680 to the U.S. dollar, or 93.63 U.S. cents, its weakest since May 27.

In a note to clients, George Davis, chief technical analyst at RBC Capital markets, said he saw support levels at C$1.0530 and C$1.0414, with resistance levels between C$1.0672 and C$1.0743.   Continued...