The Canadian dollar eased slightly against the greenback on Friday, shaking off tamer than expected inflation data as oil and gold prices rose, and the market looked ahead to an expected US interest rate cut next week. Domestic bond prices rose on the inflation data, and were also boosted by safe-haven buying ahead of the weekend.
The currency finished at C$1.0070 to the US dollar, or 99.30 US cents, down slightly from C$1.0061 to the US dollar, or 99.39 US cents, at Thursday's close. Canadian consumer prices rose 2.4 percent in December, while core prices - which exclude volatile items and are seen as a guide to future inflation - rose 1.7 percent, less than expected.
The currency eased slightly on the report, but largely held its gains of more than 1.5 US cents from the previous session. "Looking at the range, it was very much a flow-driven day, where the market was taking a bit of a breather after the hectic first four days of the week," said Matthew Strauss, senior currency strategist at RBC Capital Markets.
The currency gained 2 percent on the week, helped by an unexpected 75 basis point interest rate cut by the US Federal Reserve on Tuesday and a late week rebound in equity and commodity prices. Both oil and gold pushed higher on Friday, with gold futures hitting an all-time high of $924.30, and oil climbing back above $90 a barrel, both giving an upward push to the currency. Canada is an exporter of both commodities.