CANADA FX DEBT-C$ rallies to 7-week high on central bank action
* C$ hits 7-week high at C$1.01 vs US$ or 99.01 U.S. cents * Bond prices drift lower across the curve * ECB, BoE and China central banks move to stimulate economies By Claire Sibonney TORONTO, July 5 (Reuters) - The Canadian dollar climbed to its highest in more than seven weeks against the U.S. dollar on Thursday after central bank policy moves around the world to stimulate the economy encouraged investors to take on riskier assets. The European Central Bank cut interest rates to a record low 0.75 percent to breathe life into a deteriorating euro zone economy and back up measures agreed by government leaders last week to tackle the bloc's debt crisis. [ID:nL6E8I54IC} Following the ECB announcement, the Canadian dollar hit a session high of C$1.0100 versus the U.S. dollar, or 99.01 U.S. cents, from around C$1.0112, or 98.89 U.S. cents heading into the release. The currency was already on firmer ground before the ECB news, after China surprised the market with another interest rate cut and the Bank of England launched a third round of monetary stimulus "I think that all in all the news that we've had of the central banks this morning is supportive of the theory that central banks are committed to maintaining financial market system stability and that is generally positive for risk assets like Canada," said Camilla Sutton, chief currency strategist at Scotiabank. Sutton cautioned however that there is "still tremendous uncertainty" among investors, particularly ahead of ECB President Mario Draghi's press conference on later on Thursday and North American jobs data on Friday. By 8:12 a.m. (1212 GMT), the Canadian currency had retraced most of its gains, sitting at C$1.0123 against the U.S. dollar, or 98.78 U.S. cents, slightly firmer than Wednesday's North American session close at C$1.0132 versus the greenback, or 98.70 U.S. cents. After breaking through the 200-day moving average, Sutton said the next big test for the Canadian dollar was the 100-day moving average around C$1.0055. Canadian bond prices were flat to lower across the curve. Canada's two-year government bond was off 2 Canadian cents to yield 1.038 percent, while the benchmark 10-year bond was down 7 Canadian cents to yield 1.718 percent.
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