CANADA FX DEBT-C$ hits 3-week high on improved sentiment

Tue Jul 14, 2009 8:04am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

 * C$ rises to C$1.1431 to the U.S. dollar
 * Marks C$'s highest level since June 24
 * Bond prices stuck lower across curve
 By Frank Pingue
 TORONTO, July 14 (Reuters) - Canada's dollar shot to its
highest level in nearly three weeks versus the U.S. currency on
Tuesday as a better outlook on corporate earnings and a rise in
commodity prices opened the door to greater risk taking.
 It was enough to boost the Canadian dollar to C$1.1431 to
the U.S. dollar, or 87.48 U.S. cents, which marked its highest
level since June 24. The domestic currency backed off slightly
but still remained comfortably above Monday's close and well
above the seven-week low it touched last week.
 "One of the fears people had coming into this week was the
earnings season ... but there was probably too much bearishness
built into the market so now we're getting some relief rally at
the present time," said David Watt, senior currency strategist
at RBC Capital Markets.
 "And people aren't moving in marginal increments. People
are moving wholesale to either risk aversion or to risk seeking
and right now we are in a risk seeking environment."
 Bullish comments from prominent banking analyst Meredith
Whitney on Monday lifted expectations that quarterly earnings
from U.S. banks will be better than expected. [ID:nBNG121776]
 At 7:50 a.m. (1150 GMT), the Canadian unit was at C$1.1440
to the U.S. dollar, or 87.41 U.S. cents, up from C$1.1518 to
the U.S. dollar, or 86.82 U.S. cents, at Monday's close.
 Also helping to support the Canadian dollar was a rise in
prices for key Canadian exports like oil and gold. Oil prices
reversed the previous session's fall and topped $61 a barrel,
while gold prices inched higher to extend Monday's gain.
 Domestic bond prices were lower across the curve alongside
the bigger U.S. Treasury market as a rebound in equity markets
overseas lessened the allure of more secure assets like
government debt.
 (Editing by Theodore d'Afflisio)