CANADA FX DEBT-C$ snaps losing trend, closes above 81 U.S. cents

Tue Feb 3, 2009 4:29pm EST
 
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* C$ stages rally after dipping below 80 U.S. cents

* Rally snaps three-session losing streak

* Bond prices end slightly lower across the curve

By Frank Pingue

TORONTO, Feb 3 (Reuters) - The Canadian dollar rallied 1 percent versus the greenback on Tuesday as higher equities and unexpectedly strong U.S. data allowed the domestic currency to move comfortably off a one-week low seen overnight.

The combination of higher U.S. equity markets, a rally in prices for commodities that Canada exports and a rise in U.S. pending home sales left traders more willing to take on risk and unload the greenback, which is considered a safe-haven play.

"I think today is a one-off ... we were due for a bit of a relief rally, now the question is are we going to hold it for the next couple of days? But it's kind of hard to see," said Steve Butler, director of foreign exchange at Scotia Capital.

"Stocks looked okay, commodities looked okay and it just looked like a day of risk where people were willing to put risk back on the table."

The Canadian dollar closed at C$1.2301 to the U.S. dollar, or 81.29 U.S. cents, up from Monday's close of C$1.2436 to the U.S. dollar, or 80.41 U.S. cents.   Continued...