Canadian dollar rises, U.S. rescue vote eyed

Wed Oct 1, 2008 10:19am EDT
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*Canadian dollar rises 0.2 percent against greenback

*Investors await vote on revised U.S. bailout plan

*Bonds rally on safe haven bid as equities drop

TORONTO, Oct 1 (Reuters) - The Canadian dollar rose against the U.S. greenback on Wednesday in a slight rebound from the big losses of the previous session as investors awaited a key vote on the revised U.S. bailout plan for the financial markets.

Canadian bond prices rallied on a safe haven bid as equities markets opened lower.

At 9:42 a.m. (1342 GMT), the Canadian dollar was at C$1.0623 to the U.S. dollar, or 94.14 U.S. cents, up from C$1.0642, or 93.97 U.S. cents, at Tuesday's close.

The currency rose 0.2 percent against the greenback, barely cutting into the 1.9 percent it lost in the previous session.

"The Canadian dollar's rally against the U.S. dollar overnight was primarily a rebound after quarter-end factors," said Jack Spitz, managing director of foreign exchange at National Bank Financial.

With liquidity already tight in the markets due to concerns about more big mortgage securities-related losses by financial institutions, the need to balance books at quarter-end led to a big push for U.S. dollars on Tuesday.   Continued...