CANADA FX DEBT-C$ higher as global stocks gain

Tue Dec 22, 2009 8:16am EST
 
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 * C$ higher at 94.60 U.S. cents
 * Bonds track U.S. Treasuries lower
 By Jennifer Kwan
 TORONTO, Dec 22 (Reuters) - The Canadian dollar edged
higher against the U.S. currency on Tuesday, lifted as global
equities gained and investors were reassured by the prime
minister's comments about Canada's fiscal restraint.
 World stocks climbed on Tuesday, boosted in part by rising
expectations of U.S. economic recovery, while U.S. stock index
futures also indicated a higher open. [MKTS/GLOB] [.N]
 The move higher is in keeping with a broader trend of
Canadian dollar strength, but published comments by Prime
Minister Stephen Harper also helped to boost the currency, said
Camilla Sutton, currency strategist at Scotia Capital.
 "On a relative basis, not only is Canada better positioned
in terms of our fiscal deficit, but I think we have a more
credible plan in place as to how we will decrease the deficit
we have. I think Harper's comments just highlight that."
 The prime minister said Ottawa will continue recovery
spending until 2011, but Canadians can expect five years of
belt-tightening, the Globe and Mail reported on Tuesday.
 At 7:56 a.m. (1256 GMT), the Canadian dollar was at
C$1.0571 to the U.S. dollar, or 94.60 U.S. cents, up from
Monday's close of C$1.0614 to the U.S. dollar, or 94.22 U.S.
cents.
 But markets could be volatile as volumes were thin in
pre-holiday trading, market watchers have said.
 Also, investors awaited a flurry of U.S. macroeconomic data
on Tuesday, including a final reading of third quarter gross
domestic product, existing home sales for November and the
Richmond Fed survey for December. [.N]
 "We get some data today out of U.S. so that will probably
judge whether we continue the outperformance," said Sutton.
 With no major domestic data on tap, Canadian bond prices
followed the big U.S. Treasuries market lower.
 The U.S. 30-year Treasury bond briefly traded a full point
lower in price in thin volume on Tuesday as stock futures
pointed to a higher open on Wall Street and sapped the
safe-haven strength of government debt. [US/]
 (Reporting by Jennifer Kwan, Editing by Chizu Nomiyama)