CANADA FX DEBT-Canada dollar inches up on firming oil

Tue Feb 2, 2010 9:09am EST
 
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 * C$ rises slightly to 94.19 U.S. cents
 * Bonds outperform U.S. Treasuries
 TORONTO, Feb 2 (Reuters) - Canada's currency climbed
against the U.S. dollar on Tuesday as influential commodity
prices firmed, extending gains from the previous session.
 On Monday, the Canadian dollar appreciated for the first
time in 10 sessions, mirroring gains in commodity and equity
markets, and the same factors were driving the currency on
Tuesday.
 At 8:50 a.m. (1350 GMT), the Canadian dollar was at
C$1.0617 to the U.S. dollar, or 94.19 U.S. cents, up from
C$1.0624 to the U.S. dollar, or 94.13 U.S. cents, at Monday's
close. Earlier in the session, the currency hit 94.65 U.S.
cents before paring gains.
 "We see commodities higher and oil back above $75 and
generally risk aversion has moved a little bit to the
background," said Camilla Sutton, currency strategist at Scotia
Capital.
 The Canadian dollar was also a slightly favored
commodity-linked currency on Tuesday after the Reserve Bank of
Australia's central bank kept interest rates on hold in a
surprise move, sending the Australian dollar down more than 1
percent against the U.S. dollar. [ID:nRBA]
 The move has also prompted market watchers to eye the
Australia/Canada dollar pair, which is testing its 200-day
moving average around $0.9285.
 Short-term influence may come from the U.S. pending home
sales for December at 10 a.m. (1500 GMT). Economists surveyed
by Reuters expect a 1.0 percent rise compared with a 16.0
percent fall in the previous month.
 The data calendar for Canada is bare until Thursday when a
report on building permits for December and an index of
purchasing activity for January are due. But the main focus
will be on Friday when market players look for further evidence
of an economic recovery in the Canadian and U.S. jobs data.
[ID:nN01230910] ECONCA
 Canadian bonds were higher across the curve and
outperforming their U.S. counterparts. The two-year bond
CA2YT=RR was up 38 Canadian cents at C$100.38 to yield 1.313
percent, while the 10-year bond CA10YT=RR rose 17 Canadian
cents to C$103.09 to yield 3.361 percent.
 (Reporting by Ka Yan Ng; Editing by Theodore d'Afflisio)