Loonie climbs vs softer greenback
By John McCrank
TORONTO (Reuters) - The Canadian dollar rose to its highest level in seven weeks against a besieged U.S. dollar on Monday, fueled by uncertainty about the $700 billion bailout plan for the stumbling U.S. financial sector and how it weigh on the U.S. balance sheet.
Canadian bond prices rose in a safe-haven bid as investors fled U.S. assets.
The Canadian dollar ended the North American session at C$1.0334 to the U.S. dollar, or 96.77 U.S. cents, up from C$1.0500 to the U.S. dollar, or 95.24 U.S. cents, at Friday's close.
The currency hit its highest level against the greenback since August 4, up 1.6 percent, for its biggest one day rise since August 21.
The greenback weakened as investors waited to see just how much the U.S. government is going to pay for the so-called toxic assets clogging the U.S. financial system.
The crisis has led to the collapse of two of the top five U.S. investment banks, the sale of another, and the other two converting to holding companies.
"There is always the concern that the (U.S.) government is taking on more debt than it can handle and, ultimately, if that debt gets too large, it would have to resort to the printing press, which would create inflation in the U.S. and devalue the (U.S.) dollar," said Sal Guatieri, senior currency strategist at BMO Capital Markets.
Commodity markets were higher as investors getting out of U.S. dollar positions looked for firm assets. Continued...