The Canadian dollar finished higher versus the US dollar for the third straight session on Thursday as improved market sentiment continued to help pull the currency off its recent four-year low. Bond prices bounced back from an early sell-off and finished higher across the curve on the possibility that the Bank of Canada could follow a slew of central bank rate cuts across the globe this week with another cut of its own.
The Canadian dollar closed at C$1.2180 to the US dollar, or 82.10 US cents, up 0.6 percent from C$1.2250 to the US dollar, or 81.63 US cents, at Wednesday's close. The sudden turnaround in the dollar this week has been credited to several factors that include higher prices for Canadian exports such as oil and gold and improved market sentiment that helped lure investors back to equity markets.
The latest rally in the Canadian currency, which rose to C$1.1897 to the US dollar, or 84.05 US cents, overnight for its highest level since October 20, was pegged more to the notion that the US dollar has risen too far, too fast.
The rise in the Canadian dollar, the first time it recorded three consecutive winning session in more than a month, represents a sharp turnaround from Tuesday, when it fell to C$1.3019 to the US dollar, or 76.81 US cents, the currency's lowest level since September 2004.
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