CANADA FX DEBT-C$ rises slightly in holiday-thinned market

Tue Nov 11, 2008 9:46am EST
 
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 * Canadian dollar rallies despite lower oil prices
 * No Canadian data due out to influence sentiment
 * Bond market closed for Remembrance Day
 By Frank Pingue
 TORONTO, Nov 11 (Reuters) - The Canadian dollar was higher
versus the U.S. dollar on Tuesday morning but the move was
exaggerated in thin trading with many market players sitting
out because of holidays in Canada and the United States.
 Bond markets, which finished flat to lower on Monday, were
closed in Canada for Remembrance Day and in the United States
for Veterans Day.
 At 9:30 a.m. (1430 GMT), the Canadian unit was at C$1.1930
to the U.S. dollar, or 83.82 U.S. cents, up from C$1.1965 to
the U.S. dollar, or 83.58 U.S. cents, at Monday's close.
 Fundamentals that often direct the Canadian dollar seemed
to suggest the currency should be lower since oil prices were
down more than 4 percent and overseas stock markets were all
lower as economic gloom deepened.
 Also, the excitement about a Chinese economic stimulus plan
that offered support to the Canadian dollar in the previous
session, since it would likely mean more demand for Canada's
commodities, looks to have been short-lived.
 Yet the Canadian dollar -- which has moved comfortably off
the more than four-year low below 77 U.S. cents that it fell to
in October -- was slightly higher early on Tuesday.
 "I can only say in all honestly that it's probably down to
the fact that markets are incredibly thin today and small flows
are having a disproportionate affect because markets are so
thin," said Adam Cole, global head of currency strategy at RBC
Capital Markets in London.
 "Things will all remain very quiet until tomorrow."
 When a full slate of traders returns they could send the
Canadian dollar back down since a slide in global stock markets
refocused attention on the prospect of widespread global
recession, which would likely to cut deep into demand for oil,
which is a key export of Canada.
 (Editing by Peter Galloway)