CANADA FX DEBT-C$ hits five-month high on ECB move

Wed Feb 29, 2012 5:07pm EST
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* C$ ends at $0.9895 vs US$ or US$1.0106

* Highest close since Sept. 16

* ECB bank loans boost sentiment

* Bond prices mostly lower

By Jon Cook

TORONTO, Feb 29 (Reuters) - The Canadian dollar rose to its highest level in more than five months against the U.S. currency on Wednesday, boosted by a massive euro-zone liquidity injection by the European Central Bank and favorable month-end purchases by institutional investors.

Around 800 banks took 530 billion euros ($708.98 billion) at the ECB's second offering of three-year funding, essentially in line with market expectations, driving demand for higher yielding currencies at the expense of the euro.

"It should be bearish for the euro because it is a form of quantitative easing," said Jack Spitz, managing director of foreign exchange trading at National Bank Financial.   Continued...