CANADA FX DEBT-C$ edges lower on economic worries

Thu Feb 12, 2009 4:56pm EST
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* C$ falls to 80.33 U.S. cents

* Touches three-week low before rebounding

* Return of risk aversion blamed for slide

* Bonds rally on safe-haven status

By Frank Pingue

TORONTO, Feb 12 (Reuters) - The Canadian dollar closed slightly lower against the U.S. dollar on Thursday, briefly touching a three-week low as concerns about the global economy curbed risk appetite and sent investors to low-yielding currencies like the greenback.

The aversion to risk also weighed on North American equities for much of the session and offered a boost to prices for Canadian bonds, which are also considered a safe-haven investment.

"The Canadian dollar sold off as risk aversion returned to the market," said Matthew Strauss, senior currency strategist at RBC Capital Markets. "Also weighing on the Canadian dollar was the increased weakness in the oil market."

Jittery investors remain skeptical that U.S. government efforts will be enough to stimulate the economy and rescue a struggling financial sector.   Continued...