CANADA FX DEBT-C$ rises as oil, global equities firm
* Canadian dollar up at 96.23 U.S. cents
* Oil climbs above $81 a barrel
* Bond prices flat to slightly lower
By Jennifer Kwan
TORONTO, Jan 4 (Reuters) - The Canadian dollar rose more than one U.S. cent against the U.S. currency on Monday as the price of crude oil rallied and global financial markets were upbeat on the first trading day of 2010.
Equities got a boost after surveys showed Chinese manufacturing activity expanded at the fastest rate on record in December and the recovery among European manufacturers, led by Britain, gathered pace. [MKTS/GLOB]
Markets were awaiting Institute for Supply Management's manufacturing index for December in the U.S., which analysts forecast will rise from the prior month. [.N]
"A lot of the focus this morning was on China and higher commodity prices, and a broadly weaker U.S. dollar are all helping the Canadian dollar and other commodity currencies," said Camilla Sutton, currency strategist at Scotia Capital.
Oil, a key Canadian export, climbed above $81 a barrel on Monday, the highest in more than two months, boosted in part by an oil dispute between Russia and Belarus. [O/R]
At 9:18 a.m. (1418 GMT), the Canadian dollar was at C$1.0392 to the U.S. dollar, or 96.23 U.S. cents, up from a Dec. 31 finish at C$1.0510 to the U.S. dollar, or 95.15 U.S. cents.
The move higher extends the 2009 rally in which the Canadian dollar closed up 15.9 percent versus the greenback, rebounding from a near 19 percent drop in 2008.
BONDS FLAT TO LOWER
Canadian bond prices were flat at the short end and slightly lower at the long end, mimicking U.S. Treasury yields which rose in Europe on Monday as growing optimism over economic recovery saw funds flowing into assets perceived to be riskier such as stocks. [US/]
The two-year government bond CA2YT=RR was up 1 Canadian cent at C$99.58 to yield 1.475 percent, while the 30-year bond CA30YT=RR edged 10 Canadian cents lower to C$115.00 to yield 4.085 percent. (Editing by Jeffrey Hodgson)
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