The Canadian dollar fell against its US counterpart on Friday as rating downgrades on several euro zone countries, including France and Italy, prompted worried investors to seek safety elsewhere. The Canadian currency slid, but far less than the euro, which tumbled more than a cent on the downgrade talk leading up to S&P's official announcement after the bell.
The large sell-off in euro positions led to some profit-taking later in the day, which helped markets rally into the afternoon. For the week, euro shorts rose to a record 155,195 contracts as currency speculators increased their bets in favor of the US dollar, according to data from the Commodity Futures Trading Commission released on Friday. "We've seen some interest at the euro crosses, which has probably helped add to the bid tone in the euro so that's caused some of the equities markets to recover as well," said David Bradley, a director of foreign exchange trading at Scotia Capital.
The Canadian dollar ended the North American session at C$1.0227 to the US dollar, or 97.78 US cents, down from Thursday's finish at C$1.0183 to the US dollar, or 98.20 US cents. It gained back nearly 1 cent after hitting a session low at C$1.0320, or 96.80 US cents. For the week the currency rose 0.4 percent, from C$1.0165 to the US dollar, or 98.35 US cents.
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