Canadian dollar ended higher on Friday, helped by domestic data that showed the trade deficit narrowed more sharply than expected and broad based US dollar weakness following soft data there. The Canadian currency hit a session high of C$1.0472 to the US dollar, or 95.49 US cents, around midday before backing off slightly as the North American session neared an end.
Part of the reversal from Thursday's session was attributed to data that showed Canada's deficit shrank to C$927 million in September from C$1.99 billion in August, better than consensus forecast for a C$1.75 billion deficit. But some market experts suggested the rise in the Canadian dollar was part of a broader move by other currencies against the greenback, which slid after US data showed a wider trade deficit.
"There was quite a substantial softening of the Canadian dollar yesterday and today has been a jerky, though consistent, move to reclaim some of that lost ground," said Eric Lascelles, chief economics and rates strategist at TD Securities. "So really it's just some regrets over the extent of the US dollar appreciation yesterday and reclaiming some of that territory."
The Canadian dollar closed at C$1.0505 to the US dollar or 95.19 US cents, according to the Bank of Canada. The currency was worth C$1.0561 to the US dollar or 94.69 US cents on Thursday, according to Thomson Reuters data. It ended the week up 2.4 percent.
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