The Canadian dollar rose to its high for the week against the US dollar on Friday as appetite for risk increased along with optimism about a global economic recovery, which hurt safe-haven currencies.
US data showed job losses last month were smaller than they were in the first two months of the year, and not as bad as many had feared, which allowed the US dollar to rise against the yen, which was already labouring from having its ultra safe-haven status dented by rising risk appetite.
The euro, meanwhile, extended gains it made in the previous session against the US dollar after the European Central Bank cut interest rates less than expected. "The driver of much of the currency market right now is coming either in the euro/US, euro/yen, or dollar/yen. As a result of the markets there, the currencies like the Canadian dollar tend to take their cue," said Jack Spitz, managing director of foreign exchange, at National Bank Financial.
That helped the currency touch C$1.2297 to the US dollar, or 81.32 US cents, its highest level in a week. The Canadian unit finished at C$1.2304 to the US dollar, or 81.27 US cents, up from C$1.2409 to the US dollar, or 80.59 US cents, at Thursday's close. Attempts towards the C$1.22 level will need to be led by rises in equity markets, Spitz said.
He noted, however, that equity and commodity markets, particularly crude oil, had a weaker influence on the Canadian dollar on Friday than they have had in recent sessions. The US economy shed 663,000 jobs in March, more than expectations of a drop to 650,000. The unemployment rate rose to 8.5 percent, as forecast.
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