CANADA FX DEBT-C$ higher as commodities, equities climb

Tue Jun 9, 2009 9:37am EDT
 
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 * C$ up at 91.02 U.S. cents
 * Bonds mixed; U.S. Treasuries higher
 By Jennifer Kwan
 TORONTO, June 9 (Reuters) - The Canadian dollar rose
against the greenback on Tuesday morning, underpinned by rising
oil prices and firmness in global equities.
 The currency extended its rise from the previous session,
climbing as high as C$1.0984 to the U.S. dollar, or 91.04
before retreating to C$1.0987 to the U.S. dollar, or 91.02 U.S.
cents at 9:16 a.m. (1316 GMT).
 On Monday, the currency finished up at C$1.1168 to the U.S.
dollar, or 89.54 U.S. cents.
 The Canadian dollar was helped by a number of factors
including a weaker U.S. dollar, firmer commodity prices and
rising equity markets, said David Bradley, director of foreign
exchange trading at Scotia Capital.
 "The catalyst is pretty broad-based," said Bradley.
 Oil CLc1, a key Canadian export, snapped a two-day slide
on Tuesday, climbing above $69 a barrel as the U.S. dollar
weakened [ID:nSP387179], while gold and base metals were also
stronger.  [ID:nL9519355]
 Also supporting the Canadian currency was firmness in world
stocks, which were led by equities in Europe on reassuring
housing data from Britain. [MKTS/GLOB]
 U.S. stock indexes also opened higher as bank shares gained
ahead of a report about the imminent repayment of government
bailout funds. [ID:nN09363381]
 The strength extends the Canadian dollar's rise against the
greenback that was boosted by domestic housing starts data, in
a sign of optimism about economic recovery.
 "I think the market might have gotten a little carried away
after the U.S. non-farm (payroll) data on Friday. The dollar
rallied quite dramatically after that as the futures market was
pricing in U.S. rate hikes by the end of the year, which I
think is quite premature," said Bradley.
 "The belief that that is going to happened has dissipated
from the market."
 BONDS MIXED
 Canadian bond prices were mixed, with the short end flat to
slightly higher, following along with the U.S. Treasuries
market, where prices rallied after a recent selloff on
speculation the U.S. Federal Reserve may raise interest rates
later this year. [ID:nL9595321]
 The benchmark two-year government bond ticked higher 5
Canadian cents to C$99.76 to yield 1.374 percent, while the
10-year bond edged 2 Canadian cents lower to C$101.85 to yield
3.528 percent.
 The 30-year bond fell 15 Canadian cents to C$116.40 to
yield 4.018 percent. The comparable U.S. Treasury issue yielded
4.6037 percent.
 (Reporting by Jennifer Kwan; Editing by Padraic Cassidy)