TORONTO: The Canadian dollar strengthened slightly against a broadly weaker US counterpart on Friday as investors braced for key global events over the weekend.
Major oil exporters will meet in Doha on Sunday to discuss freezing output around current levels, while market attention also turned to the IMF-World Bank Group spring meetings in Washington.
"I think it is an appropriate step for tactical names to be squaring up positions ahead of this much event risk," said Jack Spitz, managing director of foreign exchange, National Bank Financial.
Oil prices fell as traders and analysts doubted the meeting in Doha will help to clear global oversupply quickly. US crude prices settled at $40.36 a barrel, down 2.75 percent.
Canadian home prices and sales rose in March, showing the country's housing market boom still had momentum even as separate factory data suggested an increase in economic growth at the beginning of the year may not be sustainable.
Speculators increased bullish bets on the loonie, Commodity Futures Trading Commission data showed.
Net long Canadian dollar positions rose to 2,385 contracts in the week ended April 12 from 97 contracts in the prior week. At the end of January, net short exposure was the largest in five months at 66,819 contracts.
The Canadian dollar ended at $1.2837 to the greenback, or 77.90 US cents, slightly stronger than Thursday's close of C$1.2849, or 77.83 US cents.
The currency's strongest level of the session was C$1.2798, while it touched its weakest since Tuesday at C$1.2903.
The loonie hit a nearly nine-month high at C$1.2744 on Wednesday. However, the central bank warned the same day that the country's improving economy faced downside risks, including a stronger currency that could drag on non-commodity exports.
Still, the overnight index swaps market moved to imply a slight probability of a Bank of Canada interest rate hike this year after having implied a more than 50 percent probability of a cut at the start of March.
Canadian government bond prices were higher lower across the maturity curve, with the two-year price up 1 Canadian cent to yield 0.592 percent and the benchmark 10-year rising 22 Canadian cents to yield 1.271 percent.
The Canada-US two-year bond spread was 1.6 basis points less negative at -14.6 basis points as Canadian government bonds underperformed at the front of the curve. One week ago it touched its smallest gap in more than five months at -13.6 basis points.
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