CANADA FX DEBT-C$ gets boost as appetite for risk builds

Thu Oct 8, 2009 8:02am EDT
 
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 * C$ rises to C$1.0561 to the U.S. dollar
 * Commodities and risk appetite drive Canadian dollar
 * Bond prices edge higher across curve
 By Frank Pingue
 TORONTO, Oct 8 (Reuters) - Canada's dollar rose against the
U.S. currency early on Thursday on the backdrop of higher
commodity prices and growing expectations that domestic jobs
data due later this week could be better than expected.
 Helping drive Canada's commodity-linked currency higher was
a rise in gold prices to a record high for the third successive
session and a rally in oil prices above $70 a barrel on signs
of global economic recovery. [GOL/] [O/R]
 The upbeat tone, which created demand for riskier assets,
was aided by Australian employment data that surged past
expectations and added to the case for more interest rate rises
this year. [ID:nSYD431125]
 Earlier this week the Reserve Bank of Australia raised its
interest rate, becoming the first central bank in the Group of
20 nations to tighten policy as the financial crisis abates.
[ID:nSYD520296]
 "The rate hike and then the strong job numbers overnight
just gave people a reason to stay long in risky assets and more
than enough reason to sell the U.S. dollar again." said David
Watt, senior currency strategist at RBC Capital Markets in
Toronto.
 "I don't necessarily know to what extent Australia is the
litmus test for the rest of the global economy, but that's the
role it's taken on right now,"
 At 7:30 a.m. (1130 GMT), the Canadian unit was at C$1.0561
to the U.S. dollar, or 94.69 U.S. cents, up from C$1.0624 to
the U.S. dollar, or 94.13 U.S. cents, at Wednesday's close.
 Watt said the recent upward swing in sentiment has some
people thinking "maybe, just maybe" Canada could have a
positive surprise when jobs data for September is released
early on Friday.
 The report is expected to show the domestic economy created
5,000 jobs in September while the unemployment rate rose to 8.7
percent.
 Domestic bond prices were pinned slightly lower across the
curve alongside the bigger U.S. Treasury market.
  (Editing by Padraic Cassidy)