Dollar rises for 7th session, bonds fall
By John McCrank
TORONTO (Reuters) - The Canadian dollar rode a wave of positive sentiment to close higher against the U.S. dollar for a seventh straight session on Monday, helped by a rally in equities markets, higher oil prices and positive news on the asset-back commercial paper front.
Canadian bond prices dipped in thin trading as investors squared positions ahead of the holidays.
Canadian bond and equities markets closed early on Monday, at 1:00 p.m., and the Bank of Canada gave an official closing figure for the currency at that time as well.
The Canadian dollar closed at US$1.0152, valuing each U.S. dollar at 98.50 Canadian cents, up from US$1.0074, or 99.27 Canadian cents to the U.S. dollar, at Friday's close.
With many traders, mutual fund managers, and corporate executives already off for the holidays, the markets were very thin, and any moves that were made were exaggerated, said Matthew Strauss, senior currency strategist at RBC Capital Markets.
"It seems the move was mainly flow driven, with a few main players in the market with specific positions."
But while most of the day's action involved the squaring up of books ahead of the holidays, there were some fundamentals supporting the currency as well, Strauss said.
A rally in the equities markets appears to have boosted risk appetite in the forex market, as investors moved back into the carry trade. Continued...