REFILE-CANADA FX DEBT-C$ rises as oil price pushes above $41

Wed Jan 21, 2009 10:55am EST
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(Refiles to fix dateline to Jan 21)

* C$ gets lift from rising oil price

* Government bonds lower, pace U.S. market

By Jennifer Kwan

TORONTO, Jan 21 (Reuters) - The Canadian dollar edged higher against the U.S. currency on Tuesday for the first time in three sessions, boosted by a rise in the price of oil to above $41 a barrel.

At 10:20 a.m. (1520 GMT), the currency was at C$1.2620 to the U.S. dollar, or 79.24 U.S. cents, up from C$1.2676 to the U.S. dollar, or 78.89 U.S. cents, on Tuesday.

"The Canadian dollar is part of a block of currencies today that are benefiting from higher oil prices," said Eric Lascelles, chief economics and rates strategist at TD Securities. March crude was up 2.7 percent to $41.94 a barrel on Wednesday morning. [ID:nSP402296]

The rise in the Canadian unit comes as the currency has been pressured by firmness in the U.S. dollar, said Lascelles.

Risk aversion saw the greenback rise against some currencies on Wednesday on a gloomy picture overseas with European governments offering more help to stricken banks. [ID:nSP328455]   Continued...