The Canadian dollar broke its two-day losing streak against the greenback on Friday, closing higher on renewed buying interest and technical moves, while bond prices rose slightly on the back of a rally in US treasuries.
The Canadian dollar closed at C$1.0696 to the US dollar, or 93.49 US cents, up from C$1.0747 to the US dollar, or 93.05 US cents, at Thursday's close. With no major North American data to consider, currency traders were focused on technical levels.
"I sense that there were still some people who where caught long from yesterday's (US dollar) rally up to C$1.0760 and once we broke below C$1.07, we saw some stop-loss selling," said George Davis, chief technical strategist at RBC Capital Markets.
"We saw the Canadian dollar improve a little bit on some of the crosses as well, which I think helped the Canadian dollar along." The Canadian unit had slipped to a three-week low on Thursday, after soft April retail sales and weaker than expected wholesale trade data shook investors' confidence that the Bank of Canada would raise interest rates when it announces its next decision on July 10.
Key data in the coming weeks should make the rate picture clearer, with the Bank of Canada's Business Outlook Survey and April gross domestic product both due next Friday, with June employment the following Friday.
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