CANADA FX DEBT-C$ takes advantage of US$ weakness

Mon Jan 26, 2009 5:28pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* C$ rises fourth straight session; eyes Canadian budget

* Bonds lower as supply concerns weigh; TSX ends up

By Jennifer Kwan

TORONTO, Jan 26 (Reuters) - The Canadian dollar rose for a fourth straight session against the U.S. currency on Monday as commodity prices were largely firmer and a rise in equity markets diminished the U.S. dollar's safe haven appeal.

Canadian bond prices were lower across the curve due to continuing concern about swelling supply and a firmer tone on stock markets.

The Canadian dollar finished at C$1.2241 to the U.S. dollar, or 81.69 U.S. cents, up slightly from C$1.2312 to the U.S. dollar, or 81.22 U.S. cents, on Friday.

The currency drew support from early strength in the prices of oil and other Canadian export commodities, while the U.S. dollar's safe haven appeal loosened in the face of stronger stock markets.

As well, the market was looking ahead to Tuesday's Canadian budget, which is expected to usher in the country's first deficit in a decade as the Conservative government takes stimulative measures to boost the economy. Late last week, a government official told reporters that deficits over the next two fiscal years would total C$64 billion.

"In the broader sense, commodities are looking a little bit better and you've got some optimism surrounding tomorrow's budget in terms of a fairly stimulative announcement," said Shane Enright, currency strategist CIBC World Markets.   Continued...