The Canadian dollar fell hard versus the US currency on Friday as its inability to find a comfort zone above a key level triggered a freefall that was magnified by thin markets. Domestic bond prices took advantage of the absence of any Canadian data, which lately has painted a picture of a red-hot economy, and followed US, treasuries higher.
The Canadian dollar closed at C$1.0485 to the US dollar, or 95.37 US cents, down from C$1.0437 to the US dollar, or 95.81 US cents, at Thursday's close. The sharp drop in the Canadian currency, which earlier this week reached a 30-year high of C$1.0400, or 96.15 US cents, picked up steam around midday as traders cleaned out positions on a day that saw no major economic news.
Further losses could be in store for the currency, given that its ascent over the past three weeks has mostly been the result of a weaker US dollar rather than stronger economic fundamentals.