The loonie added 0.52 of a cent to 102.15 cents U.S. on Friday.
The focus was on talks in Poland between U.S. Treasury Secretary Timothy Geithner and his European counterparts, which run through Saturday, about co-ordinating efforts to prevent Europe's debt crisis from derailing a global recovery.
On Friday, the European Union's 27 countries overcame a year of infighting to agree to new rules that make it easier to punish overspending governments.
However the EU failed to produce any new measures that might contain turmoil on debt markets.
At a news conference, eurozone officials said a decision on giving Greece its next round of bailout payments -- without which it will default on its debt -- would be delayed until October.
The U.S. is pushing for a more decisive solution. If the Greek government defaults, there will be a ripple effect across the continent that could potentially reach the United States and other countries outside the eurozone.
"Volatility is expected to continue as traders deal with eurozone headlines and determine if a real recovery will take place in the latter half of the year," said Rahim Madhavji of Knightsbridge Foreign Exchange.
"Economic growth can't be helped by the continuous volatility and negative headlines."
Commodity prices were mixed Friday.
Oil prices stepped back US$1.44 to US$87.96 a barrel. Gold added $33.30 to $1,814.70 an ounce while copper prices shed three cents at US$3.93.
On Thursday, a group of five top central banks agreed to provide U.S. dollar loans to Europe's banking sector, easing one of the concerns driving the recent turbulence in financial markets of late.
Traders were also looking toward a U.S. Federal Reserve meeting and interest rate announcement next week for signs that it may introduce another round of bond purchasing programs or other steps to help stimulate the economy.
In economic news, the U.S. Labour Department reported that unemployment rates rose in a majority of states in August for a third straight month, further proof that job growth was weak. The unemployment rates increased in 26 states. They fell in 12 and remained unchanged in 12.
But the Thomson Reuters/University of Michigan's consumer sentiment index showed U.S. consumers were slightly more confident in the economy in September, but are increasingly worried about the future. The index inched up to 57.8 in September from 55.7 in August, according to a Reuters report. The August reading was the lowest since November 2008. Friday's report is a preliminary reading.
Statistics Canada said Canadian holdings of foreign securities edged up $1.3 billion, led by further acquisitions of foreign corporate shares.
By contrast, U.S. data showed foreign holdings of U.S. Treasury securities dipped 0.4 per cent to $4.48 trillion in July. That matched the 0.4 per cent decline in April, which was the first decline in two years.Suggest a correction