CANADA FX DEBT-C$ strengthens in the teeth of greenback rally, diving oil
(Adds comments, details and closing figures) * Canadian dollar closes at C$1.1749 or 85.11 U.S. cents * Bond prices higher across the maturity curve By Solarina Ho TORONTO, Jan 5 (Reuters) - The Canadian dollar strengthened on Monday despite a collapse of oil prices below $50 a barrel and a U.S. dollar rally that showed no sign of abating. The U.S. dollar surged broadly against most major currencies pushed as the euro dropped to its lowest level since early 2006, spurred by rising political concerns in Europe ahead of elections in Greece and expectations of easier monetary policy in the euro zone. Crude prices plunged as much as 6 percent to the cheapest level since the spring of 2009 as anxiety over soft demand and excess global supply continued to stalk the market. Canada is a major crude exporter and the Canadian dollar has been hit hard by plunging oil prices since the middle of last year. "The strength of the U.S. dollar really spilled over into 2015, and the Canadian dollar's been caught in the move. That said, the Canadian dollar is impressive today," said Adam Button, currency analyst at ForexLive in Montreal. "That strength on a day when oil is just getting pummeled ... That speaks to some resilience in the Canadian dollar, but it also represents a rebound from the weakness that we had on Friday." The Canadian dollar, which was stronger on Monday against nearly every major currency except the Japanese yen , ended the session at C$1.1749 to the greenback, or 85.11 U.S. cents. That was stronger than Friday's finish at C$1.1790, or 84.82 U.S. cents, the last trade recorded in Thomson Reuters data and the Bank of Canada's official close of C$1.1762, or 85.02 U.S. cents. At one point during the session, the loonie retreated to C$1.1843, or 84.44 U.S. cents, its weakest level since May 4, 2009, briefly extending Friday's more than 1 percent plunge. Button said he sees more big drops ahead for the loonie as the U.S. dollar continues to gain momentum, and forecasts the currency could hit C$1.19 to C$1.20 by the end of January. "Right now, it's a rock and roll market. The volatility from the end of 2014 certainly hasn't gone away," he said. Canadian government bond prices were higher across the maturity curve, with the two-year rising 4 Canadian cents to yield 0.981 percent and the benchmark 10-year climbing 43 Canadian cents to yield 1.695 percent. (Editing by Peter Galloway)
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