CANADA FX DEBT-C$ steady as risk appetite holds

Mon Feb 7, 2011 8:45am EST
 
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 * C$ rises to $1.0131
 * Bond yields rise across the curve
 TORONTO, Feb 7 (Reuters) - Canada's dollar held firm
against the U.S. currency on Monday morning, supported by
optimism about a global economic recovery and rising commodity
prices.
 World stocks were firmer, hovering near a 29-month high,
and copper rallied to a record high while oil prices were also
advancing. [MKTS/GLOB]
 "We're going back to watching asset markets for direction,"
said Adam Cole, global head of FX strategy at RBC Capital
Markets in London, noting a lack of major economic data
releases this week and a risk-on tone in early trade.
 "Most currencies are down against a generally stronger
dollar. (Canada's dollar) is generally flattish against the
(U.S.) dollar but performing reasonably well against its
commodity pairs and G10 currencies."
 At 8:15 a.m. (1515 GMT), the Canadian dollar CAD=D4 was
at C$0.9871 to the U.S. dollar, or $1.0131, moderately firmer
than Friday's North American close at C$0.9884 to the U.S.
dollar, or $1.0117.
 Cole said the Canadian dollar held its ground partly in a
North American play on last week's employment figures, where
Canada's economy created more than quadruple the 15,000 that
markets had expected. [ID:nN04174016]
 Although the rise in January U.S. payrolls was much smaller
than expected, traders concluded the figure was affected by
severe snowstorms and instead focused on a sharp drop in the
jobless rate.
 "The market's reading of the U.S. employment data on Friday
was, on balance, better-than-expected despite what the headline
number showed," said Cole. "The market has gone with the view
that the weather was a major factor."
 RBC put the Canadian dollar's trading range on Monday
between C$0.9840-C$0.9905.
 Canadian government bond yields rose across the curve,
following the lead of U.S. 10-year Treasury yields, which hit
their highest since May.
 The two-year bond CA2YT=RR dipped 1 Canadian cent to
yield 1.855 percent, while the 10-year bond CA10YT=RR fell 12
Canadian cents to yield 3.476 percent.
 (Reporting by Ka Yan Ng; Editing by Theodore d'Afflisio)