Canadian dollar gains

The Canadian dollar again found support close to 1.1610 on Thursday and strengthened to 1.1575, although ranges were relatively narrow. The Canadian dollar secured further support from an increase in oil prices while there was also speculation that KKR would launch a bid for BCE. Any bid would be likely to lead to strong capital inflows which would support the Canadian dollar.

The currency strengthened further in early Europe on Friday to a 2007 high of 1.1530. There should be further near-term support weaker than the 1.16 level against the US currency unless oil prices fall very sharply.

There is the potential for a move to 1.1480 next week, especially if there is a strong GDP reading for February of at least 0.4% later on Friday, although the currency will then be vulnerable to a significant correction weaker.