The Canadian currency eked out a small gain against the US dollar on Friday, trapped in the tightest trading range in several weeks and uninspired by firmer equity markets and data that showed the country's trade deficit shrank in October. The currency remained stuck in its recent narrow band, moving in just a 21-point range during the North American session.
The range has compressed in each of the last three sessions and it was the most compact span since November 29 when the currency traded in a 48-point range. The Canadian dollar finished at C$1.0094 to the greenback, or 99.07 US cents, up from Thursday's close at C$1.0105 to the US dollar, or 98.96 US cents.
For the week, the Canadian dollar fell 0.6 percent. "The data this morning was fairly positive for Canada in the sense that exports are looking relatively strong. We have commodities very close to where they closed the day before and equities slightly stronger," said Camilla Sutton, chief currency strategist at Scotia Capital.
"So not a lot of real movement out of Canada. We're just sticking around parity but unable to really break through. We need a material catalyst to push us through the C$0.9980 level on a sustainable basis." That level above parity was reached on October 14, one of a handful of times that the Canadian dollar has returned to a one-for-one level with the US dollar since April. There was also a brief run in November where the currency struggled to hold above par.
With no top tier domestic data expected next week, attention will look to the United States for a possible catalyst, notably the Federal Reserve's interest rate decision and November reads on retail sales and the consumer price index. In economic news on Friday, higher exports helped cut Canada's October trade deficit to a smaller than expected C$1.71 billion from a revised C$2.31 billion in September, Statistics Canada reported.