CANADA FX DEBT-C$ hits highest level since 2007 on US$ woes

Tue Jul 26, 2011 5:02pm EDT
 
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* C$ finishes at C$0.9428 vs US$, or $1.0607

* Bond prices rally, long end lags U.S. Treasuries

By Andrea Hopkins

TORONTO, July 26 (Reuters) - The Canadian dollar rose to its best level in more than three and a half years against the U.S. currency on Tuesday, as debt fears in the United States continued to slam the greenback.

The Canadian currency CAD=D4 climbed as high as C$0.9407 to the U.S. dollar, or $1.0630. This was its strongest level since November 2007, when it hit a modern-day high.

The U.S. dollar skidded broadly as U.S. lawmakers showed no sign of reaching a compromise that would enable the debt ceiling to be raised, fanning default fears and dimming the greenback's prospects. [FRX/]

"The usual focus on the U.S. debt ceiling talks has really driven the markets today," said Shaun Osborne, chief currency strategist at TD Securities.

"It is not entirely clear whether we're going to get an agreement and, if we get an agreement, what the markets will make of it. And it is just the uncertainty of the situation that is really weighing on investors' sentiment."

The Canadian dollar CAD=D4 finished the session at C$0.9428 to the U.S. currency, or $1.0607, up from Monday's North American close at C$0.9458 to the U.S. dollar, or $1.0573.   Continued...