CANADA FX DEBT-C$ sticks higher after choppy morning trade

Thu Feb 5, 2009 11:48am EST
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* C$ bounces around but ultimately holds gains

* Bond prices rebound after weak U.S. data (Recasts)

By Frank Pingue

TORONTO, Feb 5 (Reuters) - The Canadian dollar was slightly higher against the U.S. dollar late Thursday morning as traders shifted away from the greenback following its early rise.

Fresh concerns about the European economy had given an boost to the U.S. currency, as traders bought the greenback as a safe haven play. But soft U.S. jobs data convinced some to lighten up on long U.S. dollar positions, helping the Canadian dollar bounce back from its early low.

At 11:45 a.m. (1645 GMT), the Canadian unit was at C$1.2296 to the U.S. dollar, or 81.33 U.S. cents, up from C$1.2320 to the U.S. dollar, or 81.17 U.S. cents, at Wednesday's close.

"Generally, things in Canada may not be as worse as they are globally and I think that's the big-picture reason why Canada hasn't really weakened off," said Steve Butler, director of foreign exchange trading at Scotia Capital.

"Maybe there is some hope that we are going to have a rough go of it, but maybe it's not going to be so bad here."

Butler said some recent factors helping to keep Canada's dollar from tumbling included recent merger-related interest and growth forecasts from the Bank of Canada that were less bearish than many had expected.   Continued...