CANADA FX DEBT-C$ weaker; little changed after budget

Tue Jan 27, 2009 5:26pm EST
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* C$ weaker after rising for four straight sessions

* Currency unchanged after release of federal budget

* Bonds mostly higher, follow U.S. market

By Jennifer Kwan

TORONTO, Jan 27 (Reuters) - The Canadian dollar weakened slightly against the U.S. currency on Tuesday, pressured by sagging oil and metal prices, while the federal government's budget had little impact on the currency.

The weakness followed four straight sessions of gains against the greenback, largely due to firmer commodity prices and easing risk aversion.

Canadian bond prices were largely higher on Tuesday, following the U.S. Treasury market higher after recent pressure due to persistent concern about swelling supply.

The Canadian dollar officially closed at C$1.2263 to the U.S. dollar, or 81.55 U.S. cents, down from C$1.2241 to the U.S. dollar, or 81.69 U.S. cents, on Monday.

Shortly after 4 p.m. (2100 GMT), the Conservative government unveiled a budget and stimulus package that promised billions in tax cuts and spending to help pull the economy out of recession, laying out plans for a budget deficit for the first time after 11 straight years of surplus. [ID:nN27408307]   Continued...