The Canadian dollar was trading at a firmer level versus
its U.S. counterpart at midday on Thursday but had fallen from its nearly
four-month high.
The Canadian currency's significant early strength was fuelled by broad-based
U.S. dollar weakness, risk appetite on the belief that the worst of the global
economic downturn may have passed and by advancing crude oil futures, according
to market watchers.
However, causing the Canadian currency to pare its gains by midday was news
that U.S. auto maker Chrysler Corp. plans to make a Chapter 11 bankruptcy filing
Thursday after a breakdown in talks with its lenders, market watchers said.
Concern that the move could have a negative impact on the Canadian economy due
to job losses at the company's Canadian plants weighed on the Canadian currency,
they said.
Also undermining the Canadian dollar at midday was a pullback in crude oil
futures and equities, as well as losses in gold futures, traders said.
However, domestic news in Canada on Thursday was mildly supportive. The 0.1%
decline in Canada's gross domestic product in February was in line with
expectations, while a 0.3% increases in industrial product prices in March was
considered positive.
At 1:03 p.m. EDT, the Canadian dollar was trading at 83.61 U.S. cents, or
US$1=C$1.1960, which compares with 83.89 U.S. cents, or US$1=C$1.1920, earlier
in the day and Wednesday's North American close of 83.13 U.S. cents, or
US$1=C$1.2030.
At midday on Thursday the Toronto Stock Exchange was slightly higher, up 19.6
points at 1:03 p.m. EDT to sit at 9,436.0.
Thursday, April 30, 2009
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