CANADA FX DEBT-C$ rallies to highest level in nearly 4 months

Fri May 1, 2009 7:52am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

 * C$ rallies to 84.52 U.S. cents
 * Move exaggerated in thin trade
 * Bond prices lower ahead of U.S. data
 By Frank Pingue
 TORONTO, May 1 (Reuters) - The Canadian dollar shot to its
highest level in nearly four months versus the U.S. dollar on
Friday as improved investor sentiment convinced traders to take
on perceived higher-risk currencies.
 Just before 7:00 a.m. (1100 GMT) the domestic currency
rallied as high as C$1.1832 to the U.S. dollar, or 84.52 U.S.
cents, which marked its highest level since Jan. 9.
 The move higher added to gains recorded during the past two
sessions, but this was believed to be exaggerated given the
thin and relatively volatile trading with European markets
closed due to the May Day holiday.
 By 7:35 a.m. (1135 GMT) the Canadian unit had retreated
slightly to C$1.1870 to the U.S. dollar, or 84.25 U.S. cents,
still up from C$1.1930 to the U.S. dollar, or 83.82 U.S. cents,
at Thursday's close.
 The Canadian dollar's run-up, however, appeared more a
result of U.S. dollar weakness rather than any Canadian dollar
specific fundamentals like higher oil prices or upbeat domestic
 Instead, with U.S. stock futures pointing to a higher open,
on Friday on optimism the economic slump is waning, investors
opted to snap up the currencies regarded as higher risk, like
the Australian and Canadian dollars.
 "Most of the other majors are higher against the (U.S.)
dollar generally so it's not really much Canada specific
today," said Adam Cole, global head of FX strategy at RBC
Capital Markets in London. "So it's generally, mostly a (U.S.)
dollar phenomenon more than a Canadian dollar phenomenon."
  Canadian bond prices, with no domestic data to consider,
were lower across the curve alongside the bigger U.S. Treasury
market ahead of a monthly U.S. manufacturing report that could
stir more optimism on the economic recovery there.
 (Editing by Theodore d'Afflisio)