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Canada dollar ends firmer, further gains seen

TORONTO: The Canadian dollar closed firmer on Monday after a day of trading quietly without any new economic data to help provide direction.

As pressures from Japanese yearend repatriation and other factors began to lift, the Canadian currency was able to attract some buying interest from speculative players, market watchers said.

The Canadian dollar closed at C$1.4568 (68.64 U.S. cents) on Monday versus C$1.4619 (68.06 U.S. cents) at the previous session's close.

There was a quick burst of trading at the opening of the International Money Market that pushed the Canadian unit up in the early morning. Several market sources said a Chicago hedge fund was involved.

"It was busy early on. That initial move from C$1.4620 to C$1.4590 was pretty quick and that was mostly off the back of the IMM," said Reid Farrill, executive director of foreign exchange at CIBC World Markets. "It was more of a grind from that point onwards, but it's closing on a firmer basis and I think it's going to be a good week for the Canadian dollar."

Farrill said the trading was quiet on Monday because of a lack of economic data and the market was set up for a quiet start this week after a flurry of activity last week.

Little Canadian economic news is expected this week, and January gross domestic product data, to be released on Friday, will likely be the major focus.

Some technical analysts said daily momentum studies point to continued strengthening in the Canadian dollar, with the C$1.4550 area a possible target in the near term.

"We've breached the chart point of C$1.4590 and we went through that this morning. Our next target point is C$1.4550. We'll probably have a shot at that tomorrow morning," said Farrill.

In cross-trading against major currencies, the Canadian dollar was at 73.21 yen and at C$1.44079 against the euro. The Canadian dollar was at A$1.1219 against the Australian dollar.-Reuters