Canadian dollar rises on oil, data. Bonds fall

Fri Dec 21, 2007 4:59pm EST
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By John McCrank

TORONTO (Reuters) - Robust commodity prices and stronger-than-expected economic data combined to propel the Canadian dollar higher against the U.S. dollar on Friday.

Canadian bond prices fell on the solid data, and as a rally in the equities markets eroded a safe haven bid for government debt.

The Canadian dollar closed at US$1.0074, valuing each U.S. dollar at 99.27 Canadian cents, up from US$1.0001, or 99.99 Canadian cents to the U.S. dollar, at Thursday's close.

The Canadian dollar is up more than 2 percent for the week, and nearly 16 percent so far this year.

"Canada has been one of the outperformers year-to-date, and it is still, despite some of the wobbles we've had as of late, one of the top performing currencies," said Shaun Osbourne, chief currency strategist at TD Securities.

To find a currency that's done better against the greenback on the year, Osbourne said you would have to look outside the G10 currencies, and to developing nations like Brazil and Turkey.

Lofty crude prices, played a large roll in the Canadian dollar's gains this year. Canada is a major oil producer and exporter.

U.S. crude oil prices jumped more than 2 percent on Friday, helping vault the Canadian currency well past the parity mark with the greenback.   Continued...