CANADA FX DEBT-C$ hits fresh one-week high, bonds up

Fri Aug 21, 2009 8:56am EDT
 
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 * C$ rises to 92.30 U.S. cents
 * Bonds edge higher
 * Bernanke speech, U.S. existing home sales eyed
 By Ka Yan Ng
 TORONTO, Aug 21 (Reuters) - The Canadian dollar hit a fresh
one-week high on Friday as overseas equities reversed course
and rebounded, boosting risk appetite, while firm underlying
commodity prices also helped.
 The Canadian unit CAD= weakened overnight to as low as
C$1.0944 to the U.S. dollar, or 91.37 U.S. cents, before
retracing ground when risk appetite was switched on by a late
rally in Chinese stocks. European stocks were also higher on
strong readings of euro zone purchasing managers' surveys.
 North American stock markets looked set to carry forward
the rise in risk appetite with U.S. stock index futures SPc1
pointing to a higher open and with Toronto's main index likely
to be supported by firm commodities. This could help the
Canadian dollar build on gains from the past three sessions.
 "I think to be able to achieve the next leg lower in
dollar/Canada, and strength for the Canadian dollar, that we're
going to have to see some of the investor confidence be
accompanied by a positive mood in equities," said C.J. Gavsie,
managing director of foreign exchange sales at BMO Capital
Markets in Toronto.
 At 8:37 a.m. (1237 GMT), the currency was at C$1.0834 to
the U.S. dollar, or 92.30 U.S. cents, up from C$1.0873 or 91.97
U.S. cents at Thursday's close.
 Market players were on guard for a 10 a.m. (1400 GMT)
speech by U.S. Federal Reserve Chairman Ben Bernanke at an
annual gathering of global policymakers in Jackson Hole,
Wyoming. Investors will be looking for hints on the U.S.
central bank's view of the economy and monetary policy.
 Data on U.S. existing home sales due out at the same time
may also be influential.
 Canadian bond prices were slightly higher across the board
ahead of the data and Bernanke's speech.
 The two-year Canadian bond was up 2 Canadian cents at
C$99.50 to yield 1.251 percent, while the 10-year bond rose 7
Canadian cents to C$103.05 to yield 3.38 percent.
 The 30-year bond was unchanged at C$118.75 to yield 3.889
percent.
 (Editing by James Dalgleish)