Canadian dollar gets boost on brief stock rebound

Tue Apr 7, 2009 12:38pm EDT
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 By Frank Pingue
 TORONTO, April 7 (Reuters) - The Canadian dollar stormed
more than 1 U.S. cent off its early low versus the greenback on
Tuesday as equities briefly showed signs of rebounding,
whetting appetite for risk.
 The Canadian dollar shot as high as C$1.2331 to the U.S.
dollar, or 81.09 U.S. cents, up from an early low of C$1.2486
to the U.S. dollar, or 80.08 U.S. cents.
 A skid in oil prices and nagging concerns about the health
of the global economy rattled global stock markets on Tuesday
and pushed investors to the safe-haven U.S. dollar.
 But when stocks temporarily bounced off their lows, it
sparked a surge in the Canadian currency. When the turnaround
in stocks fizzled, the Canadian dollar held on to its gains.
 "Some moderation in risk aversion supported the initial
move stronger in the Canadian dollar and as it moved stronger
it tested the overnight low," said Matthew Strauss, senior
currency strategist at RBC Capital Markets.
 "But since then equities have again turned around and are
heading lower, so I would question the sustainability of the
stronger Canadian dollar move for the remainder of the day."
 At 12:20 p.m. (1620 GMT), the Canadian unit was at C$1.2347
to the U.S. dollar, or 80.99 U.S. cents, up from C$1.2385 to
the U.S. dollar, or 80.74 U.S. cents, at Monday's close.
 (Editing by Peter Galloway)