CANADA FX DEBT-C$ rises after U.S. GDP data boosts risk appetite

Fri Feb 26, 2010 10:35am EST
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 * C$ higher at 94.50 U.S. cents
 * Bonds little changed
 By Claire Sibonney
 TORONTO, Feb 26 (Reuters) - The Canadian dollar perked up
against the U.S. currency on Friday after
stronger-than-expected U.S. GDP data encouraged investments in
riskier assets at the expense of the greenback.
 U.S. gross domestic product grew faster than initially
thought in the fourth quarter as businesses drew down
inventories at a much slower pace and boosted investment.
[ID:nN25113351] That suggested a more solid footing for the
world's largest economy, enticing investors to venture outside
the safe haven offered by the U.S. dollar.
 The U.S. data offset any negative sentiment on the Canadian
dollar stirred up by Friday's data on Canada's current account
that showed a wider deficit than market expectations.
 A raft of data from overseas, including
stronger-than-expected growth in Britain and industrial output
in Japan also helped boost investor appetite for riskier
assets. [ID:nLDE61P0ZB][ID:nTOE61O06H]
 "The tone of the combined batch of data overnight and the
U.S. GDP revisions have put a bit more of a bid toward the risk
trades," said Derek Holt, an economist at Scotia Capital.
 "(Canada's) current account does not get much market impact
and it was expected to show some improvement, which it did,
just not as much as expected."
 At 9:56 a.m. (1456 GMT) the Canadian dollar was at C$1.0582
or 94.50 U.S. cents, slightly up from Thursday's close at
C$1.0593, or 94.40 U.S. cents.
 The Canadian dollar slipped to C$1.0606 to the U.S. dollar,
or 94.29 U.S. cents right after the domestic and U.S. data were
released, from C$1.0580 or 94.52 U.S. cents.
 Canadian bond prices were little changed across the curve
following the economic data.
 The two-year Canadian government bond CA2YT=RR was flat
at C$100.420 to yield 1.287 percent, while the 10-year bond
CA10YT=RR lost 2 Canadian cents to C$102.750 to yield 3.401
  (Reporting by Claire Sibonney)