The Canadian dollar strengthened to a three-week high against its US counterpart on Friday as the greenback gave back some recent gains against a basket of other major currencies and a measure of domestic underlying retail sales rose in December.
Last month, the Bank of Canada left the door open to an interest rate cut should a recent slowdown in domestic growth persist. At 3:09 p.m. EST (2009 GMT), the Canadian dollar was trading 0.4% higher at 1.3210 to the greenback, or 75.70 US cents, its biggest gain since Dec. 31. It touched its strongest intraday level since January 31 at 1.3202.
For the week, the loonie was up 0.3%, its second straight weekly advance. Canadian government bond yields were lower across a flatter yield curve in sympathy with US Treasuries. The 10-year yield fell 8.1 basis points to 1.273%, nearly its lowest level since October.
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