CANADA FX DEBT-C$ touches 2-mth high as commodity prices rise

Fri Jul 15, 2011 4:54pm EDT
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* C$ ends stronger, at C$0.9543 to the US$, or $1.0479

* Reached a high of C$0.9520, strongest 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 hit a two-month high against the U.S. currency on Friday, as commodity prices rose and results of European bank stress tests eased some worries about the region's financial system.

Only eight of the 90 European banks surveyed by the European Banking Authority failed the stress tests, well below market expectations that as many as 15 lenders would need more capital to withstand a prolonged recession. [nL6E7IF19G]

"The European stress test results somewhat allayed fears about Europe's credit crisis," said Sal Guatieri, senior economist with BMO Capital Markets.

"Investors appear to be running with it and they're buying so-called riskier assets."   Continued...