TORONTO: The Canadian dollar recovered from an early slide against its US counterpart on Monday to end little changed as it struggled to find direction from mixed market signals.
US stocks slid as concerns about demand for Apple Inc products prompted investors to brace for earnings disappointments, denting risk appetite.
Meanwhile, the euro - another barometer of risk sentiment - climbed to an 11-month high versus the US dollar as investors pared expectations of monetary easing from the European Central Bank and the outlook improved for Spain, the region's fourth largest economy.
Against the Canadian dollar, the euro hit a two-week high.
There was little North American data to drive direction.
A Bank of Canada report that showed Canadian businesses saw less pressure on their production capacity in the fourth quarter and were concerned about demand over the next year boosted confidence slightly.
"It may have provided just a very modest bid, given that it was slightly above" expectations, said Mazen Issa, Canada macro strategist at TD Securities. "The initial reaction was more positive than expected for currency markets, but by and large the move was small."
The Canadian dollar ended the North American session at C$0.9838 versus the greenback, or $1.0165, slightly stronger than Friday's close at C$0.9844, or $1.0158. The currency traded in a narrow band between C$0.9832-66.
"At the end of the day all you're seeing is a bunch of noise in a tight range," said Michael O'Neill, vice president of FX trading at Jitneytrade. He blamed disappointing output at euro zone factories in November for the Canadian dollar's weakness overnight.
TD was still bullish on the Canadian dollar for the near term, noting that a spike into the C$0.9650-C$0.9750 range is possible in the next few weeks.
Canadian bond prices were similarly little changed across the curve. The two-year bond was off 1 Canadian cent to yield 1.197 percent, while the benchmark 10-year bond was off 5 Canadian cents to yield 1.947 percent.
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