CANADA FX DEBT-C$ up on risk appetite, but off overnight high

Fri Feb 13, 2009 10:01am EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* C$ hits overnight high near 81.50 U.S. cents

* Currency rallies on renewed appetite for risk

* Bond prices mixed in holiday-shortened session (Adds details and comments)

By Frank Pingue

TORONTO, Feb 13 (Reuters) - The Canadian dollar rallied versus the U.S. greenback on Friday as investor appetite for risk returned on hopes for a U.S. government plan to subsidize mortgages, but moves were exaggerated by thin trade.

The Canadian currency rallied overnight to C$1.2281 to the U.S. dollar, or 81.43 U.S. cents, along with a surge in global stock markets, but it eventually relinquished some of the gains as the rally did not carry into the North American session.

Global stocks were given a boost following news on Thursday that Washington was hammering out a plan to subsidize mortgage payments for some U.S. homeowners. [ID:nN12472591]

"It's basically the same relationship as before that has been driving the price action -- i.e., the price movement in equities," said George Davis, chief technical strategist at RBC Capital Markets.

"The risk is still that we'll see downside in equities, that in turn is going to push risk aversion back up, which will feed through negatively to the Canadian dollar."   Continued...