CANADA FX DEBT-C$ climbs after China-induced sell-off

Wed Jan 13, 2010 9:32am EST
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* Rises to C$1.0332 per US$, or 96.79 U.S. cents

* Commodity FX recover after China signals tightening

* Bonds follow U.S. Treasuries prices lower

By Jennifer Kwan

TORONTO, Jan 13 (Reuters) - The Canadian dollar edged higher against the U.S. currency on Wednesday morning as risk appetite firmed and commodity currencies recovered after weakening on China's signal of tighter monetary policy.

U.S. stocks rose at the open as a positive outlook from Kraft Foods Inc revived hopes of a strong earnings season. [.N]

"It seems to me that perhaps the risk trade is proving slightly favorable," said Eric Lascelles, chief economics and rates strategist at TD Securities.

At 9:18 a.m. (1418 GMT), the Canadian dollar was at C$1.0332 to the U.S. dollar, or 96.79 U.S. cents, up from Tuesday's finish at C$1.0393 to the U.S. dollar, or 96.22 U.S. cents.

Lascelles said the Canadian currency may have gotten a bounce after falling in the previous session as investors concluded China's surprise monetary tightening would not derail growth. [FRX/]   Continued...