Strong data lifts Canadian dollar, bonds fall

Thu Dec 6, 2007 10:07am EST
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By John McCrank

TORONTO (Reuters) - The Canadian dollar rose against U.S. dollar on Thursday as some better than expected economic data helped the currency rebound from an overnight slide caused by lower oil prices.

Canadian bond prices fell on strong economic data from Canada and the United States.

At 9:42 a.m. (1442 GMT), the Canadian dollar was at 98.78 U.S. cents, valuing each U.S. dollar at C$1.0124, up from 98.49 U.S. cents, or C$1.0153, at Wednesday's North American close.

Statistics Canada said the value of Canadian building permits issued in October jumped 6.8 percent from September, an unexpectedly large rise that resulted from demand for commercial space in Calgary, Alberta and for multi-family housing.

"In a word, unrelenting," said Stuart Hall, market strategist at HSBC Canada in a note.

"The building sector continues to reflect robust levels of activity in October despite the expectation that as the cold weather sets in, the construction sector will switch around to the jobs completion phase. Not the case in October."

The report helped lift the struggling Canadian currency from overnight lows around 98.09 U.S. cents,

Healthy U.S. crude oil inventories and lessening geopolitical tensions pushed oil prices lower, with U.S. crude CLc1 falling below $86 a barrel, before rebounding slightly. That in turn was a drag on the Canadian dollar, as oil is one of Canada's key exports.   Continued...