CANADA FX DEBT-Canada dollar jumps, bonds track Treasuries

Thu Dec 11, 2008 5:06pm EST
 
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* C$ closes above 80 cents for first time since Dec 1

* Bonds gain on weak data, equity market slump

* Canada trade surplus narrows for second straight month

By Ka Yan Ng

TORONTO, Dec 11 (Reuters) - The Canadian dollar jumped a hefty 2 U.S. cents on Thursday, supported by firmer oil prices and an increased tolerance for risk, before giving up some of its gains from weakening equity markets.

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

The Canadian dollar finished the North American session at C$1.2337 to the U.S. dollar, or 81.06 U.S. cents, up sharply 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 for the second straight month but not by as much as economists had forecast. [ID:nN11254064]

The currency also benefited from the rising price of oil, which climbed more than 10 percent at nearly $48 a barrel. The currency generally moves with the price of oil because of Canada's status as a major exporter.   Continued...