The Canadian dollar rallied to a one-week high against the greenback on Friday, to end the first quarter up more than 2 percent as investors cut bearish bets on the currency after data showed surprising strength in the domestic economy. The Canadian economy grew by 0.3 percent in January, beating analysts forecasts and reversing recent declines as the construction and manufacturing sectors picked up.
In contrast, US data consumer spending data suggested the economy was fast losing momentum after growth slowed in the fourth quarter. "Those numbers, strong Canadian data with weak US data just did a whammy on the market." said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York.
Adding to support for the loonie, US crude oil futures settled 1.4 percent higher at $60.14 a barrel. Oil is one of Canada's major exports. At 3:19 p.m. (1919 GMT), the Canadian dollar was trading 0.7 percent higher at 1.3353 to the greenback, or 74.89 US cents. The currency touched its strongest intraday level since March 21 at 1.3342.
The loonie fell 1.4 percent in March. Still, it has advanced 2.2 percent since the start of the year, the best performance in the G10. Canadian government bond prices were lower across the yield curve, with the 10-year falling 57 Canadian cents to yield 1.629 percent.