Canada dollar falls as oil prices ease, bonds drop

Fri Aug 22, 2008 10:32am EDT
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* Turnaround in oil prices blamed for currency's slide

* Canadian dollar could still register gain for week

* Bond prices drop as investors move into stocks

By John McCrank

TORONTO, Aug 22 (Reuters) - The Canadian dollar fell versus the U.S. dollar on Friday as commodity prices weakened and took a bite out of the gains made by the currency earlier in the week.

Canadian bond prices, with no economic data to trigger a move, were lower alongside the bigger U.S. Treasury market as U.S. stocks rose sharply.

At 10:15 a.m. (1415 GMT), the Canadian currency was at C$1.0456 to the U.S. dollar, or 95.64 U.S. cents, down from C$1.0440 to the U.S. dollar, or 95.79 U.S. cents, at Thursday's close.

The currency spent the overnight session in a relatively tight range of C$1.0421 to C$1.0490, after rising 1.7 percent in the previous session when oil prices surged.

Investors jumped back into the U.S. dollar overnight, in part on news that there is a potential buyer for troubled U.S. investment bank Lehman Brothers LEH.N, said Steve Butler, director of foreign exchange trading at Scotia Capital.   Continued...