Canadian dollar climbs

16 May, 2004

The Canadian dollar seesawed to a stronger finish against the greenback on Friday, as divergent economic data prompted traders to bid the currency up from the 8-1/2-month lows it hit during the previous session.
The currency finished at C$1.3902 to the US dollar, or 71.93 US cents, up a bit from C$1.3930 to the US dollar, or 71.79 US cents, at Thursday's close.
The Canadian dollar bounced between 71.62 US cents and 72.03 US cents during the session, initially boosted by a 3.4 percent surge in Canadian factory shipments in March - about four times what analysts had forecast - and a US consumer sentiment figure that came in short of estimates.
"Dollar/Canada traded down on the news on the divergence of a strong number in Canada versus a few benign numbers south of the border, but by and large there was no real follow-through on it," said Jack Spitz, director of foreign exchange at National Bank of Canada.
The Canadian dollar then rose gradually through the rest of the session, rebounding further from Thursday's steep losses.
"It's more or less position-squaring at the end of a profit-taking week," said Spitz, adding that thin Friday markets contributed to the volatility.
With a US interest rate hike expected in June, and a Bank of Canada increase seen not long after, the market has been poring thorough every scrap of economic data, looking for signs of strength or weakness that might prompt central bank action.

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