The Canadian dollar ended slightly firmer against the greenback on Friday, supported by talk of collective action from global central banks if Sunday's Greek election results spark financial market turmoil. Riskier assets started to rally on Thursday after G20 officials told Reuters that major central banks stood ready to stabilise financial markets by providing liquidity if the election result causes any adverse fallout.
"It's definitely had an impact.I think it's put some jittery investors at ease," said Mark Frey, chief market strategist at Cambridge Mercantile Group in Victoria, British Columbia. "If we went back two or three weeks, there was this building sense that this could get really, really ugly." On Friday, central banks from Tokyo to London checked their ammunition in preparation for any turmoil from Greece's election, with the European Central Bank hinting at an interest rate cut and Britain set to open its coffers.
"Everyone's bias heading into the Greek election this weekend, especially at the beginning of the week, was naturally that we would see some upward drift in dollar/Canada towards the close of the week, and that really hasn't materialised," Frey said. In fact, currency speculators cut their bets in favour of the US dollar for the first time in six weeks in the latest week, according to data from the Commodity Futures Trading Commission released on Friday.
The Canadian dollar ended the North American session at C$1.0222 versus the US dollar, or 97.82 US cents, up from Thursday's North American session close at C$1.0238, or 97.68 US cents. The currency ended the week 0.3 percent stronger. Frey put near-term resistance for the Canadian dollar around C$1.0220-25 and support around C$1.0310-15.
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