CANADA FX DEBT-C$ climbs as commodities, shrs rise after BoJ cut

Tue Oct 5, 2010 9:12am EDT
 
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   * C$ higher at 98.12 U.S. cents
 * Near highest level since earlier August
 * Bond prices flat across curve
 By Jennifer Kwan
 TORONTO, Oct 5 (Reuters) - The Canadian dollar edged higher
against its U.S. counterpart on Tuesday as investor risk
appetite rose, lifting commodity and equity prices, and as the
greenback sank on growing expectations that the U.S. Federal
Reserve will ease monetary policy further.
 "Risk appetite is increasing, which has helped commodities
with oil over $82 and gold at a new high. Equities are higher
as well. All that is factoring into a weaker U.S. dollar and a
stronger CAD," said Camilla Sutton, chief currency strategist
at Scotia Capital.  [O/R] [GOL/]
 The Bank of Japan's surprising and aggressive action to
pump more funds into the flagging economy pushed the yen lower
and world stocks higher. The BOJ's measures include cutting its
overnight rate target to virtually zero and pledging to buy 5
trillion yen ($60 billion) worth of assets. [MKTS/GLOB]
 [ID:nTOE69305D]
 "The market has shifted from no longer looking at whether
the Fed is going to introduce quantitative easing, but more
looking at now what it will look like," said Sutton.
 "It's just a question of how much and how it will be
implemented."
 At 8:58 a.m. (1258 GMT), the Canadian currency CAD=D4 was
at C$1.0192 to the U.S. dollar, or 98.12 U.S. cents, up from
Monday's close at C$1.0220 to the U.S. dollar, or 97.85 U.S.
cents.
 Sutton said key short-term technical levels include
C$1.0180 to the U.S. dollar and C$1.0280.
 Canadian government bond prices were largely flat, with the
two-year bond CA2YT=RR up 1 Canadian cent to yield 1.310
percent, while the 10-year bond CA10YT=RR ticked 1 Canadian
cent higher to yield 2.751 percent.
 (Editing by Jeffrey Hodgson)