CANADA FX DEBT-C$ falls as risk aversion boosts greenback

Wed Feb 25, 2009 10:09am EST
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* C$ falls as equities fail to build on Tuesday's gains

* Slide in C$ cushioned by rally in oil prices

* Bond prices extend Tuesday slide on supply concerns

By Frank Pingue

TORONTO, Feb 25 (Reuters) - The Canadian dollar turned slightly lower on Wednesday morning due to a modest rebound in the greenback as North American equities turned lower, but earnings reports from Canadian banks this week could give the currency a boost.

With no key Canadian economic data due until the end of the week, the moves in the currency were being dictated largely by the direction in its U.S. counterpart, which rose on its safe-haven status.

"It's primarily just that the U.S. dollar is reasonably well bid across the board and so dollar/Canada is higher as a consequence," said Adam Cole, global head of foreign exchange trading at RBC Capital Markets in London.

At 9:35 a.m. (1435 GMT), the Canadian unit was at C$1.2457 to the U.S. dollar, or 80.28 U.S. cents, down from C$1.2433 to the U.S. dollar, or 80.43 U.S. cents, at Tuesday's close.

Helping to cushion the commodity-linked Canadian dollar's slide was a rise in oil prices to above $40 a barrel, which extended their 4 percent rally in the previous session.   Continued...