CANADA FX DEBT-C$ gets boost as risk aversion fades

Thu Jul 9, 2009 8:39am EDT
 
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 * Canadian dollar rebounds to C$1.1580
 * Commodities and equities fuel gain
 * Bond prices lower across curve
 By Frank Pingue
 TORONTO, July 9 (Reuters) - Canada's currency surged versus
the U.S. dollar on Thursday as higher commodity prices and a
rebound in global equities helped reduce risk aversion.
 The rise in the Canadian dollar, which rallied as high as
C$1.1555 to the U.S. dollar, or 86.54 U.S. cents, lifted it
comfortably off the seven-week low it tumbled to on Wednesday.
 "We've had a turnaround in stocks and commodities
overnight, and so that has basically pushed risk aversion
levels lower as a result," said George Davis, chief technical
strategist at RBC Capital Markets. "But with equity markets
stronger we've seen the U.S. dollar generally weaker across the
board."
 Davis said the Canadian currency also benefited from some
stop loss orders once it moved below the C$1.1615 area as
traders in London took profits on the U.S. dollar.
 At 8:30 a.m. (1230 GMT), the Canadian unit was at C$1.1580
to the U.S. dollar, or 86.36 U.S. cents, up from C$1.1676 to
the U.S. dollar, or 85.65 U.S. cents, at Wednesday's close.
 Oil prices were back higher after a six-session skid while
gold prices also recovered from the eight-week low touched in
the prior session. Canada is a key exporter of oil and gold and
its currency is often influenced by their prices.
 The Canadian dollar could now stick in a range ahead of
Friday's domestic jobs data. The report is is expected to show
the economy shed 35,000 jobs in June while the unemployment
rate moves to 8.7 percent from 8.5 percent in May.
 Domestic bond prices were lower across the curve alongside
the bigger U.S. Treasury market after the Bank of England left
its asset purchase program unchanged, reducing the appeal of
more secure assets like government debt.
 (Editing by Padraic Cassidy)