The Canadian dollar ended firmer against the US currency on Friday as investors absorbed a speech by Federal Reserve Chairman Ben Bernanke that that left the door open to further stimulus measures to boost the struggling US economy. There was a mixed reception across markets as Bernanke offered few details on the US central bank's options and stopped short of signalling specific actions.
"The chance of Bernanke coming through with an actual policy recommendation was quite small," said David Tulk, chief Canada macro strategist at TD Securities. "Initially, as expected, markets reacted negatively, only to realise that no harm had been done either, so they resumed their ascent."
Equity markets also turned higher, after initially dropping steeply, on Bernanke's comments that the Fed has "a range of tools" it could use to boost the economy. He also said it was critical for the US economy's health to reduce joblessness and also expressed long-term optimism. Still, the turn in sentiment was not full-fledged as safe-haven assets still found some favour. The price of gold rose and government bonds, including Canada's, were flat to higher.
The Canadian dollar rebounded to finish at C$0.9830 to the US dollar, or $1.0173, up from C$0.9868 to the US dollar, or $1.0134, at Thursday's close. It rose 0.6 percent on the week. Only four of 22 economists surveyed by Reuters predicted lower GDP for the quarter, another seven predicted no growth.