TORONTO, Sept 17: The Canadian dollar climbed against the greenback and hit multiyear highs versus the euro and yen on Friday, helped by weak US data and concerns over this weekend’s German election.

Bond prices followed US treasuries lower, as growing inflation concerns in the United States built worries about more Federal Reserve interest rate increases.

The Canadian dollar finished at C$1.1787 to the US dollar, or 84.84 US cents, up from C$1.1848 to the US dollar, or 84.40 UScents, at Thursday’s close.

The loonie was pushed close to last week’s nine-month high by a double hit of US economic data that pressured the greenback.

The US current account deficit narrowed in the second quarter to $195.7 billion, but was wider than the $193 billion expected by Wall Street forecasts. As well, the University of Michigan’s closely watched consumer sentiment index fell to 76.9 in September from 89.1 in August, far below analyst estimates.

That was certainty part of the picture. The US dollar was obviously not doing too well this morning regardless, and the Michigan numbers didn’t help either, said Steven butler, director of foreign exchange at Scotia Capital.

It’s another great close for Canada, despite oil selling off a little bit.

Crude oil futures settled 2.7 per cent lower at $63 a barrel. However, the currency hit a seven-year high against the yen and a three-year peak versus the euro, which was hit by concerns that Germany’s general election on Sunday could result in a coalition government.

After rising alongside the price of crude for much of the year, the Canadian dollar has held its strength while oil has retreated from the $70 per barrel level of a few weeks ago.

Butler said that, despite the recent retreat, energy prices are still high enough to draw more investment to Canada’s resource-rich economy.

There’s tons of great reasons to like Canada. Oil’s part of the picture, but it’s not the only part of the picture, and with oil at $60, $70, or $50, it’s still a great story, he said, adding that rallying gold prices were also a help to the currency on Friday.

US benchmark gold futures finished at a 17-year high of $463.30 an ounce.

The Bank of Canada raised rates last week for the first time in nearly a year, and is expected to implement at least one more increase this year.

The domestic data calendar will pick up next week, with wholesale trade data on Tuesday, retail sales on Wednesday and consumer inflation on Thursday. As well, Bank of Canada Governor David Dodge will give a speech in Toronto on Thursday.

The two-year bond retreated 10 Canadian cents to C$99.07 to yield 3.193 per cent, while the 10-year bond fell 38 Canadian cents to C$104.67 to yield 3.915 per cent.

The 30-year bond lost 62 Canadian cents to C$113.78 to yield 4.208 per cent. In the United States, the 30-year treasury yielded 4.556 per cent. —Reuters