Canada Afternoon: C$ Edges Up Slightly In Calm Consolidation

TORONTO --The Canadian dollar ended incrementally higher in narrow, uneventful dealings Friday, as consolidation and pre-weekend position-squaring dominated activity in the currency after it had moved sideways all week.

The U.S. dollar was trading at C$1.0777 at 3:35 p.m. EDT (1935 GMT), from C$1.0766 at 8:00 a.m. EDT (1200 GMT) and C$1.0785 late Thursday.

Activity in the Canadian dollar Friday was an oasis of calm in comparision to choppy and occasionally volatile movements in the euro and some other currencies, as neither the global risk environment nor developments closer to home provided much incentive for departure from established positions.

Some fatigue may have crept into the U.S. dollar-Canada market as well, as the Canadian unit has made little headway over the past week despite positives such as rising commodity prices and a Bank of Canada policy statement on Thursday that did not indicate heightened concern over the currency's strength.

That is leading some currency watchers to question whether the Canadian dollar's inability to take advantage of these supportive factors to extend its recent improvement may be risking an unwinding of recent gains soon.

A report from CIBC World Markets Friday noted that speculators are "seeing meager returns on their Canadian dollar positions," setting up the possibility of a reversal.

If those with heavy exposure to the Canadian dollar "get bored of waiting and rush to the exits, we could see the Canadian dollar retreat quite quickly given the scale of existing positions," CIBC World Markets economists Avery Shenfeld and Krishen Rangasamy wrote.

These are the exchange rates at 3:35 p.m. EDT (1935 GMT), 8:00 a.m. EDT (1200 GMT), and late Thursday.

   USD/CAD     1.0777      1.0766     1.0785 
   EUR/CAD     1.5716      1.5725     1.5735 

   CAD/JPY      84.17       84.35      85.04