Friday March 20, 2009 - 20:00:57 GMT
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Reuters - www.reuters.com
Forex Market News - CANADA FX DEBT-C$ weakens, but set to gain on the week
TORONTO, March 20 (Reuters) - The Canadian dollar retreated
from early gains on Friday as stock markets fell, putting
pressure on a currency that had rallied on the back of a U.S.
plan to buy up government bonds.
At 2:55 p.m. (1855 GMT), the currency was at C$1.2407 to
the U.S. dollar, or 80.60 U.S. cents, down from C$1.2377 to the
U.S. dollar, or 80.80 U.S. cents, at Thursday's close.
Despite the pullback on Friday, the Canadian dollar was
still holding solid gains for the week, up about 2.5 percent,
stemming from the aftermath of the U.S. Federal Reserve's
announcement that it plans to buy up government bonds.
But Toronto's main stock index looked set to break its
eight-day string of higher closes. The Canadian dollar's moves
have recently been closely linked to the commodity-rich index.
"It's ending the week on a softer tone given the return of
risk aversion with equities selling off," said Sal Guatieri,
senior economist at BMO Capital Markets.
Earlier, the currency was moderately firmer against the
greenback after figures showed Canadian January retail sales
rose almost twice as much as expected. [ID:nN19306411]
Despite the rare piece of positive economic news, the
overall economic landscape still points to a weak reading for
gross domestic product data for January due out next week,
The retail statistics initially helped push the Canadian
dollar towards its overnight high of C$1.2292 to the U.S.
dollar, or 81.35 U.S. cents, but stopped short. It later hit a
session low at C$1.2450 to the U.S. dollar, or 80.32 U.S.
(Reporting by Ka Yan Ng; Editing by Jeffrey Hodgson)
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