CANADA FX DEBT-Canadian dollar edges up on U.S. growth story

Thu Mar 15, 2012 4:27pm EDT
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* C$ ends at C$0.9922 vs US$, or $1.0079

* Bond yields reach 2012 highs

By Claire Sibonney

TORONTO, March 15 (Reuters) - The Canadian dollar nudged higher against its U.S. counterpart on Thursday as a run of U.S. economic data lifted riskier assets and easing U.S. Treasury yields reduced some of the appeal of the greenback.

Canada's role as the largest U.S. trading partner has recently helped it outperform other major currencies as healthy U.S. data and a more optimistic economic tone from the Federal Reserve have boosted North American sentiment.

"You have the North American trade that's going on right now. The Canadian dollar is the second beneficiary and sometimes even the No. 1 beneficiary of strong U.S. growth," said Adam Button, currency analyst at Forexlive in Montreal.

The Canadian dollar has also been closely correlated with the U.S. stock market.

"For some time you've had the Canadian dollar being driven by risk sentiment and that has largely been gauged against the S&P 500," said Mazen Issa, macro strategist at TD Securities.

The S&P 500 index topped the 1,400 mark on Thursday for the first time since the 2008 financial crisis, after data showed the number of Americans claiming new jobless benefits fell to a four-year low last week and manufacturing activity in the Northeast picked up this month.   Continued...