* C$ closes at C$1.0010 vs US$, or 99.90 U.S. cents
* Touched 3-1/2 low of C$1.0048, or 99.52 U.S. cents
* Many see White House fiscal cliff meeting as
* Bond prices rise along the curve
By Solarina Ho
TORONTO, Nov 16 The Canadian dollar notched a
modest gain against the U.S. currency on Friday after touching a
3-1/2-month low earlier in the session, bolstered by a White
House meeting on the "fiscal cliff" that congressional leaders
said was constructive.
Democrats and Republicans emerged from a meeting with
President Barack Obama on Friday vowing to find common ground on
taxes and spending that would allow them to head off a looming
"fiscal cliff" that could push the economy back into
Equity markets rallied on the news after being mired in
negative territory for much of the past two weeks.
"We're taking our taking cues from equities more so than
anything else at this point in time, because that's the one
that's going to show the most reaction to issues arising out of
not getting support for moves in the fiscal cliff talks," said
John Curran, senior vice president at CanadianForex.
The Canadian currency finished at C$1.0010 to the
U.S. dollar, or 99.90 U.S. cents, slightly firmer than its North
American close on Thursday of C$1.0013, or 99.87 U.S. cents.
There was "a fair bit of volatility today," said Jack Spitz,
managing director of foreign exchange at National Bank
Financial. "The uncertainties prevail. And they will weigh on a
currency that's high beta, like Canada."
The currency touched a 3-1/2-month low of C$1.0048, or 99.52
U.S. cents earlier after breaking a significant technical
resistance level for the USD/CAD.
"Going into the middle of the day, the London close, (it)
appeared as though people were obviously shedding some risk,"
said Curran, who added that there was still corporate demand to
buy Canadian dollars.
"We have had an outside day - higher high, lower low - which
usually indicates the end of a trend, but this trend has been
sideways, so that's not really going to be highly indicative."
Investors have also been focused on the slowing global
economy, Europe's debt crisis and escalating violence in the
Canada's performance was mixed against a basket of major
currencies. It rose against the euro but reversed gains against
the Australian dollar after touching a near two-week high and
fell against the New Zealand dollar after hitting a 3-1/2 week
Next week, Canadian inflation will be the most meaningful
domestic economic data released. Spitz said the report is
unlikely to be influential on the Bank of Canada, since early
guidance showed little to no upward price pressures.
South of the border, Wall Street will have a shortened week,
due to the U.S. Thanksgiving holiday.
"Unless there are significant developments that are
happening in these political hot button places like the Middle
East, Europe, or Japan for that matter, then I think the market
will likely use the opportunity to take a bit of a breather,"
said Spitz, adding that the drop in liquidity over the holiday
will also be a factor.
Prices for Canadian government debt were higher across the
curve, with the two-year bond adding 1 Canadian cent
to yield 1.070 percent and the benchmark 10-year bond
rising 22 Canadian cents to yield 1.697 percent.