November 20, 2009 / 2:19 PM / 8 years ago

CANADA FX DEBT-C$ falls as commodities, equities weaken

3 Min Read

* C$ at C$1.071 to the US$, hits lowest since Nov. 9

* Weaker gold, crude, equity prices weigh

* Bonds mostly firmer on safe haven appeal

By Scott Anderson

TORONTO, Nov 20 (Reuters) - The Canadian dollar fell on Friday, hurt by weaker equity and commodity prices, including a drop in oil and gold, and broad-based U.S. dollar strength as many investors lost their appetite for risk.

The greenback rose against a range of currencies on Friday, extending the previous day's gains, as investors retreated from riskier assets including higher-yielding currencies. [USD/]

"We are very much caught up in the broader theme of risk aversion that has gained further momentum overnight. On the back of that we saw equities selling off, commodities selling off and then on the flipside the U.S. dollar rallying," said Matthew Strauss, senior currency strategist at RBC Capital Markets.

"There is no surprise that the Canadian dollar struggled overnight versus the U.S. dollar."

At 8:30 a.m. (1430 GMT) Canada's currency was at C$1.071 to the U.S. dollar, or 93.37 U.S. cents, down from Thursday's close C$1.0635 to the U.S. dollar, or 94.03 U.S. cents.

The currency touched a session low of C$1.0733, or 93.17 U.S. cents its weakest level since Nov. 9.

The greenback's gain and falling risk appetite hit commodity prices, which heavily influence the Canadian dollar because the country is a commodity exporter.

Oil edged lower, dropping below $77 a barrel, extending a 2 percent fall in the previous session. [O/L]

Meanwhile, gold fell from $1,140 an ounce in Europe on Friday as the upward momentum which has lifted prices more than 9 percent this month was kept in check by a recovery in the dollar index. [GOL/]

Strauss said the market would likely shrug off comments late on Thursday from Bank of Canada Governor Mark Carney who said Canada's economy performed worse than expected in the third quarter and risks further setbacks due to the sharp rise of the Canadian dollar.[nN19514256]

Domestic bond prices were mostly higher, mirroring gains in U.S. Treasuries, with concerns about the global economy and weaker equities feeding demand for less risky assets. ($1=$1.07 Canadian) (Editing by Jeffrey Hodgson)

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