Canadian dollar buoyed by China news, data

Wed Feb 15, 2012 9:49am EST
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By Claire Sibonney

TORONTO (Reuters) - The Canadian dollar advanced against the U.S. dollar on Wednesday morning as riskier assets rallied on comments from China's central bank chief that the country would keep investing in euro zone debt and after upbeat global economic data.

Central Bank Governor Zhou Xiaochuan said China was ready to play a bigger role in solving Europe's debt problems and remains confident in the euro, lifting sentiment for stocks.

"It follows the overall flow that seems to continue to be marginally biased for risk appetite," said Jack Spitz, managing director of foreign exchange at National Bank Financial.

"There was an attraction to buying up risk on the China news

but it seems to be going through a fair bit of erosion just simply because of the noise coming out of Europe."

Weighing on the risk rally, news that euro zone finance officials were examining ways of delaying parts or even all of a second bailout for Greece, while still avoiding a disorderly default, rekindled fears about the region's debt crisis.

On the upside, however, better-than-expected data from Germany and France helped confidence, while a gauge of manufacturing in New York State picked up in February to its highest level in more than 1-1/2 years.

Canada's currency was also supported by oil prices. U.S. crude climbed above $102 a barrel after Iranian state TV said Iran stopped oil exports to six European states in retaliation for European Union sanctions imposed on the Islamic state, adding to supply concerns.   Continued...

A Canadian dollar coin, commonly called a "Loonie" and an American dollar bill are seen in this staged photo in Toronto, March 17, 2010. REUTERS/Mark Blinch