CANADA FX DEBT-C$ rallies to 8-week high, helped by U.S. data

Thu Jul 7, 2011 4:55pm EDT
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* C$ closes at C$0.9587, or $1.0431

* Optimism grows with U.S. jobs data, Trichet comments

* Commodity prices help drive gains

* Bonds mostly weaker, Canada outperforms

By Trish Nixon

TORONTO, July 7 (Reuters) - Canada's dollar strengthened against the greenback on Thursday, touching its highest level in more than eight weeks, as risk appetite improved on encouraging U.S. employment data and euro zone developments.

A sharp rise in U.S. private-sector jobs raised expectations that Friday's government report on June payrolls will provide more evidence of an improving labor market. [ID:nN1E7660BF]

Separately, European Central Bank President Jean-Claude Trichet said the bank would relax rules and keep providing liquidity to struggling Portugal, allaying worries about Europe's debt crisis. [ID:nLDE7660BO]

"The market took the comments from Trichet earlier as being positive, so it's more of a risk-on kind of atmosphere," said David Bradley, director of foreign exchange trading at Scotia Capital.   Continued...