CANADA FX DEBT-C$ climbs to 2-mth high, helped by commodity rise

Fri Jul 15, 2011 1:06pm EDT
 
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* C$ touches C$0.9520 to the US$, or $1.0504

* Strongest level since May 11

* Gains after European bank "stress test" results

* Rising oil, commodity prices support

By Trish Nixon

TORONTO, July 15 (Reuters) - Canada's dollar strengthened to a two-month high against the U.S. currency on Friday, boosted by commodity price gains and the country's relatively healthy fiscal position compared to the United States and Europe.

The price of oil, a major Canadian export, rose as traders focused on the potential for a weaker greenback, given the uncertainty surrounding U.S. talks meant to cut deficits and avert a debt default. [O/R]

The results of "stress tests" showing eight European banks are not strong enough to withstand a prolonged recession and need to raise 2.5 billion euros in capital also highlighted troubles there. [ID:nL9E7G9005]

"(The Canadian dollar) is grinding a little bit stronger with some of the commodities doing well. Crude oil especially is up again today. Stocks are pointing in the right direction," said Steve Butler, director of foreign exchange trading with Scotia Capital in Toronto.   Continued...