CANADA FX DEBT-C$ darts to 5-wk high after US, Canada data

Tue Sep 14, 2010 9:47am EDT
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* C$ rises to highest level since Aug. 6

* Bonds ease after stronger-than-expected data

* U.S. retail sales up in August (Adds details)

TORONTO, Sept 14 (Reuters) - The Canadian dollar jumped to its highest point against the U.S. currency in more than five weeks on Tuesday morning after stronger-than-expected U.S. retail sales data, which further eased fears of a double-dip recession.

U.S. government data showed sales at retailers increased more than expected in August, notching the largest gain in five months on strong receipts at gasoline stations and clothing outlets. [ID:nN13206701]

"Retail sales are the main driver. They stood up on the four core measures," said Sacha Tihanyi, currency strategist at Scotia Capital.

Separately, a report showed Canada's industrial capacity use rose in the second quarter of 2010, the fourth consecutive increase, on strength in both the manufacturing and non-manufacturing sectors. [ID:nN14247776]

The Canadian currency CAD=D3 rose as high as C$1.0246 to the U.S. dollar, or 97.60 U.S. cents, its highest level since Aug. 6, in early trade. At 9:18 a.m. (1318 GMT), it had pared gains to C$1.0261 to the U.S. dollar, or 97.46 U.S. cents, up modestly from Monday's close of C$1.0273 to the U.S. dollar, or 97.34 U.S. cents.

Bank of Canada Governor Mark Carney was due to give a lecture in Germany later on Tuesday on "The Economic Consequences of the Financial Reforms." However, market watchers doubted he will provide fresh insight into monetary policy thinking in Canada, said Matthew Strauss, senior currency strategist at RBC Capital Markets.

Canadian bond prices were flat to lower on Tuesday after the latest North American data. The two-year Canada bond was off 1 Canadian cent to yield 1.460 percent, while the 10-year bond slipped 7 Canadian cents to yield 3.092 percent. (Reporting by Ka Yan Ng and Jennifer Kwan; editing by Peter Galloway)