The Canadian dollar dropped hard on Friday, giving up most of Wednesday's big gains as strong US economic signals and hawkish US Federal Reserve comments boosted the greenback against most currencies. The Canadian dollar finished at C$1.2156 to the US dollar, or 82.26 US cents, down from C$1.2021 to the US dollar, or 83.19 US cents, at Thursday's session close.
The currency fell at the hands of both the greenback and the yen, at one point giving back all the gains it racked up on Wednesday when it made one of its biggest one-day jumps ever versus the US currency.
"If one looks at the Canadian dollar from Tuesday to Friday, you're going to see a close-to-close of effectively nothing, but there's been a heck of a lot of intraday volatility," said Jack Spitz, director of foreign exchange at National Bank of Canada.
The yen rallied after the head of the European Central Bank reiterated a call for foreign exchange flexibility in Asia. While the greenback was helped by some strong US data, and got a big overnight boost from comments from St. Louis Federal Reserve President William Poole.
He said the Fed would not hesitate to depart from its pace of measured interest rate increases if necessary, which the market took as a sign that the pace of US rate hikes could pick up.