CANADA FX DEBT-C$ gets lift from higher oil and bank earnings

Thu Feb 26, 2009 9:41am EST
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* C$ best performer among the major currencies

* Rally aided by domestic bank quarterly earnings

* Bond prices narrowly mixed across the curve (Adds details)

By Frank Pingue

TORONTO, Feb 26 (Reuters) - Canada's dollar surged more than 1 percent on Thursday given the combination of higher commodity prices, a weaker U.S. currency and earnings from domestic banks that continue to outshine foreign peers.

The move put the Canadian currency at the top end of its recent trading range, where it has attracted buying interest each time it fell through the C$1.26 level.

The Canadian currency shot as high as C$1.2395 to the U.S. dollar, or 80.68 U.S. cents, comfortably above its Wednesday close of C$1.2546 to the U.S. dollar, or 79.71 U.S. cents.

A rally in prices for oil, a key Canadian commodity and export, was one of the main drivers that helped the Canadian dollar recoup the entire drop recorded in Wednesday's session.

The currency's rise was also aided by quarterly earnings from Canadian banks that indicated they have been less damaged by the financial crisis than lenders in the United States and elsewhere.   Continued...