CANADA FX DEBT-C$ rises as oil, global equities firm

Mon Jan 4, 2010 9:35am EST
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 * 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.
 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.
 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)