TORONTO: The Canadian dollar softened further against the greenback on Friday as the US currency benefited from comments by German Chancellor Angela Merkel about the problem of a strong euro and the price of oil continued to slide.
The euro sank on Friday after Merkel made a rare comment on exchange rates by saying a strong euro made it harder for countries like Spain and Portugal to reap the benefits of economic reform.
World shares saw a muted end on Friday to what has been their best week since April, as yet another setback in Greek debt talks took its toll on European markets.
At around 9:26 EDT (1326 GMT), the Canadian dollar was at C$1.2345 to the greenback, or 81.00 US cents, weaker than Thursday's close at C$1.2275, or 81.47 US cents.
The currency has traded between C$1.2279 and C$1.2347 so far in the session.
In Canada, Canadian home prices rose in May to a record high despite a drop in Calgary as weak oil prices continued to hurt demand in Canada's energy heartland, the Teranet-National Bank Composite House Price Index showed on Friday.
In the US, producer prices in May recorded their biggest increase in more than 2-1/2 years as the cost of gasoline and food rose, suggesting that an oil-driven downward drift in prices was nearing an end.
Brent crude was trading 32 cents lower at $64.79 a barrel at 1100 GMT, while US light crude was down 53 cents at $60.24. Oil prices slipped on Friday after the world's top crude exporter Saudi Arabia said it was ready to raise output to new record highs, potentially adding to a global supply glut.
Canadian government bond prices were mixed across the maturity curve, with the two-year rising 0.5 Canadian cent to yield 0.652 percent and the benchmark 10-year falling 11 Canadian cents to yield 1.825 percent.
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