CANADA FX DEBT-Oil knocks down C$, bonds get safe-haven lift

Wed Mar 11, 2009 5:11pm EDT
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* C$ reverses direction, wipes out early gains

* Slide in oil price primary source of weakness

* Bearish economic reports also hit currency

* Market focus on Friday's trade, employment data (Updates to close)

By Ka Yan Ng

TORONTO, March 11 (Reuters) - The Canadian dollar closed slightly lower against the U.S. currency on Wednesday, erasing early gains, hurt by weaker oil prices and reports that predicted the economy is still in for a rough ride.

The currency finished at C$1.2862 to the U.S. dollar, or 77.75 U.S. cents, down from C$1.2852 to the U.S. dollar, or 77.81 U.S. cents, at Tuesday's close.

Early in the session the currency rallied as high as C$1.2751 as growing risk appetite resulted in a range of currencies strengthening against the greenback, which is typically viewed as a safe haven.

But the Canadian unit then dropped low as C$1.2904 to the U.S. dollar, or 77.50 U.S. cents, as oil, a major Canadian export, fell more than 6 percent to below $43. [ID:nSP383602]   Continued...