Loonie rises on firm data, bonds sag

Fri Jul 18, 2008 9:51am EDT
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By John McCrank

TORONTO (Reuters) - The Canadian dollar was higher against the U.S. dollar on Friday morning after Canadian wholesale trade data for May came in stronger than expected, helping boost confidence in the economy.

Bond prices fell in response to firmer equities markets and the solid data.

At 9:34 a.m., the Canadian dollar was at C$1.0030 to the U.S. dollar, or 99.70 U.S. cents, up from C$1.0068 to the U.S. dollar, or 99.32 U.S. cents, at Thursday's close.

The currency spent the overnight session in a narrow range of C$1.0037 and C$1.0057, then rose on the back of the data.

"I think the wholesale number was quite a strong number and suggests the economy continues to move along quite well here," said Shaun Osborne, chief currency strategist at TD Securities.

Statistics Canada said Canadian wholesale trade jumped 1.6 percent in May from April, thanks to higher global demand for fertilizer. It was the biggest monthly increase since January, with only the auto sector posting a contraction. Excluding autos, wholesale sales were up 2.2 percent.

The median forecast by analysts surveyed by Reuters was for a 0.5 percent monthly gain.

Other data showed that Canada's composite leading index was unchanged in June, following two months of gains, as weakness in housing and new orders for factory goods offset strong consumer spending.   Continued...

<p>A Canadian one dollar coin, also know as a loonie, is shown in Montreal in this April 28, 2006 file photo. REUTERS/Shaun Best</p>