Canadian dollar up against US$ on soft U.S. data

Mon Jun 16, 2008 10:20am EDT
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By John McCrank

TORONTO (Reuters) - The Canadian dollar rose against the U.S. dollar on Monday amid some weak U.S. data, but fell against most other major currencies as the market took the view that what's bad for the U.S., Canada's biggest trading partner, is bad for Canada.

Domestic bond prices rallied along with U.S. Treasuries after an unexpectedly weak reading on the Federal Reserve Bank of New York's "Empire State" manufacturing index, which underscored that the U.S. economy was still weak.

At 9:46 a.m. EDT, the Canadian dollar was at C$1.0238 to the U.S. dollar, or 97.68 U.S. cents, up from C$1.0292 to the U.S. dollar, or 97.16 U.S. cents, at Friday's close.

"Most of the G10 currencies are up fairly strongly against the U.S. dollar today," said Adam Cole, head currency strategist at RBC Capital Markets in London.

Cole said that while the Canadian dollar held its own against the greenback, it fell against most other currencies.

Following its best week in more than three years against a basket of major currencies, the U.S. dollar weakened Monday after a Group of Eight meeting failed to issue a joint statement on currencies.

Going into the meeting, market participants had expected the G8 would say something to support the U.S. dollar and its impact on inflation as energy and fuel prices soar.

The Canadian dollar failed to rise against the greenback overnight, but made up some ground after the U.S. data came in weaker than expected. However, the Canadian dollar still fell along with the U.S. currency on the crosses.   Continued...