CANADA FX DEBT-C$ jumps more than a penny as stocks rally

Mon Aug 15, 2011 4:43pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* C$ ends up at C$0.9799 to the U.S. dollar, or $1.0205

* Bond prices fall as risk sentiment drives stocks higher (Updates to close)

By Ka Yan Ng

TORONTO, Aug 15 (Reuters) - Canada's dollar finished more than a penny higher against the U.S. currency on Monday, as a solid rally in equity markets overcame disappointing U.S. manufacturing data.

Toronto's main stock market index notched its highest close in more than a week, driven by bargain-hunting, optimism over the euro zone debt crisis and acquisition activity on both sides of the border. [.TO]

U.S. stock indexes rallied for a third day on Monday as investors saw Google's (GOOG.O: Quote) $12.5 billion offer for Motorola Mobility (MMI.N: Quote) as a signal to jump back in after weeks of sharp selling. [.N] As well, Toronto-Dominion Bank TD.TO announced a deal to buy MBNA Canada's $8.6 credit card portfolio from Bank of America (BAC.N: Quote). [ID:nN1E77E06U]

"At the moment we're just ignoring the data and just looking at the bounce in equities. I would have expected a more negative reaction in the Canadian dollar to the numbers, frankly, but we didn't get that," said Shaun Osborne, chief currency strategist at TD Securities.

A gauge of manufacturing in New York state dented sentiment briefly, sending the Canadian dollar towards a session low that nearly matched Friday's close.

The data showed the sector unexpectedly contracted for the third month in a row in August with the general business conditions index sagging to minus 7.72 from minus 3.76 the month before. Economists polled by Reuters had expected a reading of zero. [ID:nN9E7ID022] [ID:nN1E77E04P]   Continued...