CANADA FX DEBT-C$ hits near 3-month high on recovery hope

Mon Jan 11, 2010 9:40am EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

 * C$ up at C$1.0307 to the U.S. dollar
 * Touches highest level since Oct. 15
 * Housing starts data better than expected
 * Bond prices flat to higher across curve
 By Jennifer Kwan
 TORONTO, Jan 11 (Reuters) - The Canadian dollar climbed to
a near three-month high against the U.S. currency on Monday as
the greenback weakened and oil and equity markets bounced on
stronger trade data from China, fanning optimism about
prospects for economic recovery.
 The currency rose to C$1.0252 to the U.S. dollar, or 97.54
U.S. cents -- the highest level since Oct. 15 -- as oil prices,
a key Canadian export, climbed 0.6 percent near $83.24 a barrel
and world stocks and U.S. stock index futures climbed in part
on the China's trade data. [ID:nSGE60A01E] [MKTS/GLOB]
 "We have U.S. dollar weakness and stronger commodity prices
following the data out of China," said Matthew Strauss, senior
currency strategist at RBC Capital Markets.
 At 9:11 a.m. (1411 GMT), the Canadian dollar was at
C$1.0307 to the U.S. dollar, or 97.02 U.S. cents, up from
Friday's finish at C$1.0309 to the U.S. dollar, or 97.00 U.S.
cents.
 The Canadian dollar's strength was aided by a weak U.S.
dollar, which headed lower on lingering sentiment from Friday's
U.S. employment data that showed U.S. employers unexpectedly
cut 85,000 jobs in December and comments from a Federal Reserve
official that U.S. rates are likely to stay low for some time.
[FRX/]
 The currency also moved higher as domestic data showed
housing starts rose 5.9 percent in December to a seasonally
adjusted rate of 174,500 units from an upwardly revised 164,800
units in November, Canada Mortgage and Housing Corp said on
Monday.
 The number of starts in December beat the consensus
expectations of analysts who had called for 160,000 starts.
[ID:nHND005512]
 Elsewhere, data showed the value of Canadian building
permits fell 4.6 percent in November from October, roughly in
line with expectations, as a decline in nonresidential projects
offset the ninth consecutive increase in housing permits.
[ID:nN11413438]
 Canadian bond prices were flat to slightly higher, but the
moves were muted, said Strauss.
 "We had housing starts come out a little better than
expected, but then again building permits slightly weaker than
expected. Overall, it continues to point to recovery and a
decent recovery into 2010, but nothing to suggest the Bank of
Canada will change its conditional commitment (to rates) at
this point," he said.
 The central bank is widely expected to keep its benchmark
interest rate at an all-time low of 0.25 percent until
mid-year.
 (Editing by Theodore d'Afflisio)