Economic data released by Statistics Canada indicated the pace of inflation has dropped, which bolsters the idea that the Canadian economy is pulling away from reaching full capacity. The loonie was driving toward a sixth consecutive week of gains against the U.S. dollar, matching its best in about 24 months. But losses to the currency on Friday cut into the weekly gains.
Declines suffered by the monetary unit of Canada gained momentum following the report's release because "today's data suggest little near-term inflationary pressures in the domestic economy, another reason for the Bank of Canada to keep rates on hold," economist Emanuella Enenajor with CIBC World Markets told The Canadian Press.
The commodity-linked monetary unit also lost value on Friday as a result of declines to crude oil, which is the top commodity of the natural-resources-rich nation.
Losses to the Canadian dollar come one day after it touched its highest value in three-plus months against its southerly rival, according to The Canadian Press.