CANADA FX DEBT-Oil price pulls C$ off post-Mubarak high
* C$ at C$0.9890, or $1.0111
* Strong Canadian trade data gave early boost
* C$ hit session high of C$0.9881 on Mubarak news
* Two- and 10-year bond prices lower (Updates with details and comments)
By Solarina Ho
TORONTO, Feb 11 (Reuters) - The Canadian dollar rose against the greenback on Friday, but was off highs hit immediately after Egyptian President Hosni Mubarak resigned, as falling oil prices tempered the currency's gains.
The Canadian dollar and other risk-sensitive assets rose on news of Mubarak's departure on hopes the Egyptian crisis has to some degree been defused.
"That's probably created a bit more of a pro-risk sentiment," Shaun Osborne, chief currency strategist at TD Securities, said after Mubarak bowed to pressure from a popular uprising and left office. [ID:nLDE7192NZ]
The Canadian dollar had strengthened earlier on data that showed Canada's trade balance returned to surplus in December after nine months of deficits, fueling hopes of an export recovery. Oil and energy product shipments to the United States led the export surge. [ID:nN11157853]
At 1:24 p.m. (1824 GMT), the Canadian currency CAD=D4 was at C$0.9890 to the U.S. dollar, or $1.0111. The currency closed the North American session on Thursday at C$0.9958 to the U.S. dollar, or $1.0042.
It climbed as high as C$0.9881, or $1.0120, just after Mubarak's resignation was announced. But a subsequent drop in the price of oil, a major Canadian export, then pulled it lower.
Crude prices fell as concern eased that the Egyptian unrest could spread to oil producing countries in the Middle East and that supply could be disrupted. [O/R]
Osborne said the Canadian currency is trading in a tight band that he does not expect it to break out of soon. He sees resistance in the low C$0.9800 range and support just above U.S. dollar parity.
"The Canadian dollar is looking quite highly valued against the U.S. dollar as it is. What would drive us significantly beyond that point? I think you'd have to see a sharper widening out in short-term interest-rate spreads in the Canadian dollar's favor."
Canadian bond prices were mostly lower after the strong trade data. The two-year Canadian government bond CA2YT=RR fell 7.5 Canadian cents to yield 1.914 percent, while the 10-year bond CA10YT=RR fell 12 Canadian cents to yield 3.483 percent. (Editing by Peter Galloway and Jeffrey Hodgson)
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