Canadian dollar clipped by rising U.S. dollar

Fri Apr 25, 2008 10:05am EDT
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By John McCrank

TORONTO (Reuters) - The Canadian dollar fell against a rallying U.S. dollar on Friday, as investors bet the worst was over for the U.S. economy.

Domestic bond prices fell along with the bigger U.S. market as the more optimistic U.S. outlook took the shine off the safe-haven appeal of government debt.

At 9:20 a.m. (1320 GMT), the Canadian dollar was at C$1.0180 to the U.S. dollar, or 98.23 U.S. cents, down from C$1.0142 to the U.S. dollar, or 98.60 U.S. cents, at Thursday's close.

While the Canadian dollar was down slightly against the greenback, it was up against most other major currencies.

"What stands out is that most currencies are diving against a generally very, very strong U.S. dollar today," said Adam Cole, head currency strategist at RBC Capital Markets, in London.

"But Canada, I guess, as the markets perceive Canada as being a net winner from an improving U.S. economy, is being carried with the U.S. dollar."

The U.S. absorbs more than three-quarters of Canadian exports.

The Bank of Canada said on Thursday it believes the U.S. economic slowdown will last longer than it had previously thought.   Continued...