CANADA FX DEBT-C$ up as risk appetite returns after Fed, Obama

Thu Jan 28, 2010 9:29am EST
 
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 * Higher at C$1.0583 to the US$, or 94.49 U.S. cents
 * Markets reassured by Obama focus on jobs growth
 * Bond prices flat to slightly higher across curve
 By Jennifer Kwan
 TORONTO, Jan 28 (Reuters) - The Canadian dollar edged
higher against the U.S. dollar on Thursday as commodity prices
firmed and investors sought more risk after a speech by U.S.
President Barack Obama.
 Global equities, typically a barometer of risk appetite,
climbed on market optimism after Obama focused on job creation
in his first State of the Union address late on Wednesday,
rather than new details on clamping down on Wall Street. U.S.
stock index futures also signaled a higher open. [MKTS/GLOB]
 "Risk trades are cautiously back on today and this is
something that is favoring the commodity players," said Eric
Lascelles, chief economics and rates strategist at TD
Securities.
 Obama's acknowledgment of the importance of fiscal
restraint and the need to get jobs growth going play favorably
to the market, said Lascelles.
 But another main driver was Wednesday's U.S. Federal
Reserve's slightly brighter tone on the U.S. economy.
 "The Fed's comments yesterday are continuing to buoy the
markets. The improved economic growth outlook and in fact the
dissent by one member wanting to hike rates sooner rather than
later suggests there is an expectation this recovery
persists."
 At 9:13 a.m. (1413 GMT), the Canadian dollar was at
C$1.0583 to the U.S. dollar, or 94.49 U.S. cents, up from
Wednesday's finish at C$1.0647 to the U.S. dollar, or 93.92
U.S. cents.
 The price for oil, a key Canadian export, rose to above $74
a barrel [O/R], lifted in part by the Obama speech, while gold
prices were also firmer. [GOL/]
 Market watchers said the focus would now shift to whether
Ben Bernanke would win a second term as chairman of the Federal
Reserve.
 Government bond prices were little changed at the short end
and slightly firmer at the long end as Canada struggled to keep
pace with a selloff seen in other markets, said Lascelles.
 U.S. Treasuries pared earlier losses on Thursday after data
on jobless claims and durable goods came in weaker than
expected, signaling a U.S. economic recovery will remain slow.
[US/]
 (Editing by Jeffrey Hodgson)