Canadian dollar up on U.S. earnings, better Europe mood

Wed Apr 25, 2012 8:26am EDT
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By Jennifer Kwan

TORONTO (Reuters) - Canada's dollar rose against its U.S. counterpart on Wednesday, amid rosier U.S. corporate earnings and signs of improving investor sentiment about the euro zone debt market.

The currency took its cue from the euro and global stock markets, which advanced after forecast-beating results from Apple Inc (AAPL.O: Quote) boosted optimism in a corporate earnings season already outstripping expectations by a wide margin. <.

"The No. 1 thing was Apple. That certainly spurred the market into a risk-on mode, helping Canada this morning," said Steve Butler, managing director of foreign exchange trading at Scotiabank.

Also contributing to the market mood for riskier assets was weaker demand at a German auction of new 30-year bonds. The ultra low yielding but safe paper seemed to be much less attractive to investors. <MKTS/GLOB>

At 7:45 a.m. (1145 GMT), the Canadian dollar was at C$0.9859 against the U.S. dollar, or $1.0143, up from its Tuesday's finish at C$0.9880 against the U.S. dollar, or $1.0121.

The key domestic event on Wednesday will be Bank of Canada Governor Mark Carney discussing the Monetary Policy Report before the Senate Standing Committee on Banking after the market's close. That follows his comments on Tuesday before the House of Commons finance committee.

Markets will also digest a key policy statement by the U.S. Federal Reserve, and peruse it for clues on whether there may be more monetary policy easing. .N

Carney had reiterated to the finance committee that the central bank might have to increase interest rates because of the stronger performance of the economy and firmer underlying inflation.   Continued...