CANADA FX- C$ soars to 3-1/2 year high on risk rally

Wed Apr 20, 2011 8:17am EDT
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  * C$ touches high of C$0.9498, or $1.0529
  * Commodities, growth-related currencies surge
 By Claire Sibonney
 TORONTO, April 20 (Reuters) - The Canadian dollar rose to
its highest level since November 2007 against the U.S. dollar
on Wednesday, boosted by renewed demand for carry trades,
higher commodity prices and above-forecast inflation in
 The currency CAD=D4 touched a high of  C$0.9498 to the
U.S. dollar, or $1.0529, with traders citing strong demand in
the C$0.9500 area, However, talk of option barrier protection
at that level existed.
 Commodity currencies such as Canada's dollar,  and the euro
surged as upbeat corporate earnings in the U.S. prompted
investors to buy riskier assets amid rising growth
expectations. [FRX/]
 Gold hit a record above $1,500 an ounce, while prices for
oil and copper also rallied. [GOL/] [O/R] [MET/L]
 "Today it's all about global rather than domestic factors.
Although dollar/Canada is at a new 3 and a half year low, CAD
is down against most of the other G10 currencies today," said
Adam Cole, global head of FX strategy at RBC Capital Markets.
 "When the U.S. dollar is independently weak it tends to
take CAD with it on the crosses which is exactly what it's
doing today, so really it's a (U.S.) dollar move not a Canadian
dollar move."
 The move followed gains made in the previous session after
data showed Canada's annual inflation rate last month jumped to
its highest level since September 2008, putting more pressure
on the Bank of Canada to raise interest rates. [ID:nN19274146]
 Following the report, a Reuters poll showed a growing
number of primary dealers believe the central bank will resume
raising interest rates in July. [CA/POLL]
At 7:55 a.m. (1155 GMT), the Canadian dollar stood at
C$0.9514 to the U.S. dollar, or $1.0511, up from Tuesday's
North American finish at C$0.9565 to the U.S. dollar, or
 Cole said there was little left in the way of U.S. dollar
support toward the Canadian dollar's modern-day high of $1.10.
 He said the carry trade, a strategy for using lower
yielding currencies such the greenback are used to fund higher
yielding currencies such as the Australian dollar bonds, was
also boosting risk appetite broadly.
  (Additional reporting by London Forex team)
 (Editing by Theodore d'Afflisio)