The Canadian dollar weakened against its US counterpart on Friday, pressured by corporate selling ahead of a long weekend and broader gains for the greenback. For the week, the loonie dipped 0.1 percent. It was the second straight week that the loonie edged lower after having reached on January 31 its strongest level in four months of C$1.2969 against the greenback.
"The market really wants to take a run below C$1.30, but it's just not quite there yet," said Adam Button, currency analyst at ForexLive. The Canadian dollar ended at C$1.3099 to the greenback, or 76.34 US cents, slightly weaker than Thursday's close of C$1.3080, or 76.45 US cents.
"There's talk about corporate demand (for US dollars) going through today," Button said. "A long weekend kind of move." Monday is a market holiday for both Canada and the United States. The currency's strongest level of the session was C$1.3061, while it touched its weakest since February 10 of C$1.3126. The US dollar rose against a basket of currencies, leaving it little changed on the week following mildly hawkish comments from Federal Reserve Chair Janet Yellen and surprisingly strong US data on retail sales and consumer prices. The recent strengthening of the Canadian dollar belies the threat of a proposed US border adjustment tax that could slam the currency due to Canada's heavy reliance on exports to its southern neighbor, forex strategists and fund managers say.
Still, speculators increased bullish bets on the Canadian dollar to the most since September, data from the Commodity Futures Trading Commission and Reuters calculations showed. Canadian dollar net long positions rose to 19,340 contracts as of February 14 from 8,550 a week earlier. Canadian government bond prices rose across the yield curve in sympathy with US Treasuries as concerns over the French election helped support demand for safe-haven assets. The two-year rose 3.5 Canadian cents to yield 0.778 percent and the 10-year climbed 28 Canadian cents to yield 1.711 percent. The 10-year yield touched its lowest intraday level since February 10 at 1.694 percent.