The Canadian dollar slumped on Friday against its US counterpart after a bailout deal for Greece met with fresh opposition, but the currency's slide was tempered by data that showed Canada's trade surplus unexpectedly rose to a three-year high in December.
Overnight the Canadian dollar had fallen below parity with the greenback for the first time in more than a week after the leader of a far-right party in Greece's coalition government said he could not back a recently negotiated debt bailout agreement, reigniting worries about a chaotic default.
Athens faces a deadline next week to have a deal in place to secure a 130 billion euro ($172.95 billion) rescue package from the European Union to finance massive bond redemptions coming due in March. The news knocked the euro from its two-month high on Thursday against the US dollar.
Canada's currency has largely traded in step with the euro for much of the year, rising above the one-to-one level with the US dollar. But the increased uncertainty over Greece had investors selling riskier currencies and buying the US dollar on Friday. The Canadian dollar stood at C$1.0017 to the US dollar, or 99.83 US cents, down from Thursday's close at C$0.9956, or $1.0044.
Early losses were pared after a Statistics Canada report showed Canada's monthly trade surplus unexpectedly rose to a three-year high of C$2.7 billion in December. The currency had fallen as low as C$1.0040, or 99.60 US cents, earlier in the session. O'Neill said it would likely trade between that level and a high of C$0.9980 on Friday.
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