CANADA FX DEBT-C$ hits session high after U.S. durable goods

Wed Aug 24, 2011 10:00am EDT
 
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 * C$ up at C$0.9869 to the U.S. dollar, or $1.0133
 * Bond prices mostly higher
 * Strong U.S. durable goods data supports risk sentiment
 By Ka Yan Ng
 TORONTO, Aug 24 (Reuters) - Canada's dollar jumped against
the U.S. currency on Wednesday after better-than-expected U.S.
data offered hope that the U.S. economy was not heading for
another recession.
 The Canadian currency held relatively steady in the
overnight session on a mixed bag of news. Equity markets
seesawed, and the German Ifo survey showed German business
morale posting its steepest drop since the aftermath of the
Lehman Brothers collapse in late 2008. Meanwhile, Moody's
downgraded Japan's sovereign debt rating.
 But the U.S. July durable goods orders supported demand for
riskier assets, and it pushed up the Canadian dollar, which hit
a session high and secondary technical U.S. dollar support at
C$0.9840 to the U.S. dollar, or $1.0163.
 "It's reversed the tone," said Jack Spitz, managing
director of foreign exchange at National Bank Financial.
 U.S. durables goods orders rose twice as much as expected
on strong demand for aircraft and motor vehicles, but a gauge
of business spending fell. The data also topped economists
estimates after excluding the volatile transportation sector.
[ID:nCAT005498]
 It was a welcome change from a spate of weak sentiment
surveys recently.
 At 9:32 a.m. (1432 GMT), the currency CAD=D4 was at
C$0.9869 to the U.S. dollar, or $1.0133, up from C$0.9880 to
the U.S. dollar, or $1.0121, at Tuesday's close.
 "Still the market is compressing the range in dollar/Canada
with the ultimate breakout being a function of what happens on
Friday," said Spitz, referring to the key market event this
week when global central bankers, economists, and academics
gather in Jackson Hole, Wyoming.
 Investors are waiting to see if the U.S. Federal Reserve
announces further economic stimulus a year after Chairman Ben
Bernanke launched a second round of quantitative easing to
revive the struggling U.S. economy.
 Government bonds were mostly flat to higher and
outperformed their U.S. counterparts following the U.S. data.
 The two-year bond CA2YT=RR was unchanged to yield 0.950
percent, while the 10-year bond CA10YT=RR edged up 18
Canadian cents to yield 2.369 percent. The 30-year bond was the
only issue on the curve that fell.
 (Editing by Padraic Cassidy)