CANADA FX DEBT-C$ climbs 2 U.S. cents, bonds gain

Thu Dec 11, 2008 10:22am EST
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* Canadian dollar above 80 U.S. cents

* Bonds gain on negative tone to stocks, weak data

* Canada trade surplus narrows for second straight month

TORONTO, Dec 11 (Reuters) - The Canadian dollar jumped a hefty 2 U.S. cents on Thursday, supported by a trade figures and firmer oil prices.

Bond prices were higher as stock markets took a weaker tone and a raft of data underscored the global economic downturn.

At 10:05 a.m. (1505 GMT), the Canadian dollar was at C$1.2286 to the U.S. dollar, 81.39 U.S. cents, up from C$1.2596 to the U.S. dollar, or 79.39 U.S. cents, at Wednesday's close.

The Canadian dollar was already firming before the release of the country's trade figures, which showed the surplus narrowed in October to C$3.78 billion from C$4.25 billion in September, the second straight month of contraction and not as bad as feared. [ID:nN11254064]

The Canadian dollar also benefited from the rising oil prices on Thursday, up about 7 percent and headed to $46 a barrel. The currency has generally moved with the price of oil in the past few years because of Canada's status as a major exporter.

"It looks like Canada lagged some of the gains overnight and we did some catch-up early in the morning," David Watt, senior currency strategist at RBC Capital Markets, said.   Continued...