The Canadian dollar climbed against its US counterpart on Friday and notched its biggest weekly gain in more than three months as optimism grew that Europe is on track to resolve its debt crisis and that North America might dodge a recession.
Group of 20 finance ministers and central bank chiefs began two days of talks in Paris on Friday, which investors hope will provide a basis for a draft plan to stem the debt crisis in time for a European Union summit on October 23. The positive mood rekindled a rally in the euro and spilled over into North American equities and commodities with oil prices jumping 3 percent and supporting Canada's resource-driven dollar.
The Canadian dollar ended the North American session at C$1.0105 against the US dollar, or 98.96 US cents, up from Thursday's close of C$1.0197 to the US dollar, or 98.07 US cents. The currency ended up 2.7 percent for the week, its biggest weekly percentage gain since July.
In its bullish mood, the market brushed off a report that showed US consumer sentiment slipped more than expected in early October to the lowest level in more than 30 years. It also paid little attention to a credit rating downgrade for Spain, but rallied on strong earnings from Google Inc. "For Canada, next week is still going to be taking its cues from the broader moves in both the Canadian and US markets," Sutton said.
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