The Canadian dollar rose in see-saw trade on Friday as news of a third takeover bid for Canadian nickel miner Inco Ltd offset downward pressure from surprisingly strong US retail sales data.
Canadian bonds, without any domestic data that would lend direction, dropped along with US Treasuries on the retail sales news. The Canadian dollar closed at C$1.1237 to the US dollar, or 88.99 US cents, up from C$1.1262 to the US dollar, or 88.79 US cents, at Thursday's close.
It fell to C$1.1257 to the US dollar, or 88.83 US cents, immediately after the robust US retail sales report, which topped expectations with a gain of 1.4 percent in July. But the Canadian unit rebounded to briefly reach C$1.1175, or 89.48 US cents, by late morning, only to ease from that level in the afternoon.
"There's been a bit of a swing to it today, you're seeing the push and pull of a combination of factors," said Ted Gould, a trader at Investors Bank & Trust in Boston.
Those include higher oil prices, which benefit the Canadian unit because Canada is a major oil producer, and the likelihood that the US interest-rate premium over Canadian rates will stay intact in the short term, Gould said.