CANADA FX DEBT-C$ hits 1-week high; Russia central bank boosts

Wed Nov 25, 2009 11:55am EST
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* Touches high of C$1.0450 to U.S. dollar

* Russian central bank says to buy C$s (Adds further analyst comment, background)

By Frank Pingue and Jeffrey Hodgson

TORONTO, Nov 25 (Reuters) - Canada's dollar hit a one-week high after Russia's central bank said on Wednesday it wants to invest some of its reserves in the currency, suggesting the Canadian unit could benefit from diversification away from the U.S. dollar.

The currency was also boosted by gold's rise to a record high, steady prices for oil and other commodities, and renewed hunger for riskier assets. [GOL] [O/R]

The currency at one point rallied as high as C$1.0450 to the U.S. dollar, or 95.69 U.S cents, matching the high it reached on Nov. 18.

"(This) plays into the theme of central banks diversifying out of greenbacks and looking for possibly safer havens, and Canada looks relatively well compared with some other countries," said Sal Guatieri, senior economist at BMO Capital Markets.

At 11:37 a.m. (1625 GMT), the currency was at C$1.0501 to the U.S. dollar, or 95.23 U.S. cents. It closed at C$1.0580 to the U.S. dollar, or 94.52 U.S. cents, on Tuesday.

Russia's central bank said it is preparing to invest some of its foreign exchange reserves in Canadian dollars to diversify its portfolio. [ID:nGEE5AO19O]   Continued...