The Canadian dollar shot to its highest level in more than a week versus the US dollar on Friday, bolstered by a sharp rally in prices for key Canadian exports and speculation of merger-related interest. Canadian bond prices finished lower across the curve due to a combination of supply concerns and comments from the Bank of Canada earlier this week that the economy would recover faster than many had expected.
The Canadian dollar closed at C$1.2312 to the US dollar, or 81.22 US cents, up from C$1.2537 to the US dollar, or 79.76 US cents, at Thursday's close. A late-session rally helped power the currency to its highest level since January 14 and allowed the Canadian dollar to exit the week with a 1.4 percent gain.
That marked a sharp turnaround from earlier in the week when it was down as much as 2.2 percent. Canada is a key exporter of oil and gold, so a 4 percent surge in gold prices to break above the $900 an ounce level and a 6 percent jump in oil prices paved the way for the jump.