CANADA FX DEBT-C$ falls as commodities drop, greenback climbs

Mon Dec 7, 2009 7:55am EST
 
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 * Canadian dollar down at 94.39 U.S. cents
 * Bond prices flat to higher across curve
 TORONTO, Dec 7 (Reuters) - The Canadian dollar fell against
the U.S. currency on Monday morning, pulled down by weak
commodity prices and as the greenback gained on investors
expectations U.S. interest rates could soon rise.
 The dollar hit a five-week high against a currency basket
on Monday, extending its rally from Friday when
stronger-than-expected U.S. jobs data fueled speculation the
Federal Reserve may consider winding down its stimulus measures
sooner than had been expected. [FRX/]
 "We've seen Fed fund futures starting to price in the
possibility of a hike even by the middle of this year," said
said Matthew Strauss, senior currency strategist at RBC Capital
Markets.
 "On the back of those expectations following the job
numbers the U.S. dollar is really benefiting."
 The data showed U.S. employers cut a far
fewer-than-expected 11,000 jobs in November, well below
expectations of a 130,000 loss, while the unemployment rate
fell to 10 percent. [ID:nN04320079]
 At 7:43 a.m. (1243 GMT), the Canadian dollar was at
C$1.0594 to the U.S. dollar, or 94.39 U.S. cents, down from
Friday's finish at C$1.0579 to the U.S. dollar, or 94.53 U.S.
cents.
 The broad-based U.S. dollar strength was also due to weak
equity markets down and lower oil and gold prices, key Canadian
exports, added Strauss.
 U.S. oil fell to below $75 a barrel on Monday due in part
to a stronger U.S. dollar, while gold prices were also lower.
[O/R] [USD/] [GOL/]
 Canadian bond prices were flat to higher across the curve,
tracking U.S. Treasuries which steadied after Friday's sell-off
on the jobs data. [US/]
 (Editing by Theodore d'Afflisio)