The Canadian dollar strengthened against its US counterpart on Friday, paring this week's decline, as oil prices rallied and domestic data showed the trade deficit narrowed in August. Canada posted a trade deficit of C$955 million in August after a revised C$1.4 billion deficit in July, as both imports and exports rose, Statistics Canada said. Export volumes were less encouraging, dipping 0.2%.
At 9:28 a.m. (1328 GMT), the Canadian dollar was trading 0.2% higher at 1.3304 to the greenback, or 75.17 US cents. The currency, which was on track to decline 0.4% for the week, traded in a range of 1.3300 to 1.3339. Canadian government bond prices were lower across much of the yield curve in sympathy with US Treasuries. The two-year fell 3 Canadian cents to yield 1.438% and the benchmark 10-year was down 6 Canadian cents to yield 1.257%. The 10-year yield touched its lowest intraday level since Sept. 5 at 1.230%.