Loonie closes down almost 1 cent

The loonie gyrated through the day Friday before reaching its Bank of Canada official close at 99.10 cents US, down 0.90 of a cent.

The Bank of Canada was closed on Thursday for the Remembrance Day holiday.

Though many factors were at play, the loonie's swings were in keeping with a generally volatile day in currency markets.

That volatility was itself largely caused by the ending of the G20 summit in South Korea, which closed with no consensus on how to address growing trade imbalances and currency disputes.

Deep divisions from the U.S.-China currency dispute have emerged.

"The G20 statement had little immediate market impact and, as is often the case, is riddled with conflicts and signs of compromise," said Adam Cole, Global Head, FX Strategy at RBC Capital Markets.

The crux of the dispute is Washington's allegations that Beijing is artificially keeping its currency, the yuan, weak to gain a trade advantage. But the U.S. position has been undermined by its own recent policy of printing money to boost a sluggish economy, which is weakening the dollar.

But the loonie was also generally weaker due to fears of lower commodity prices. Canada's currency tends to move in lockstep with the price of oil and base metals, which of late have been closely tied to Chinese demand.

Speculation Friday that a new round of monetary tightening is on the way started after a report showed that China's economy is overheated. The most recent data shows inflation running well above four per cent in the world's second-largest economy.

The U.S. dollar, meanwhile, also gained strength against the euro amid mounting speculation that Ireland — one of Europe's most financially troubled countries — would not be able to cut public spending and may have to resort to a bailout.