CANADA FX DEBT-C$ sags as oil drops on swine flu fears

Tue Apr 28, 2009 4:51pm EDT
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* C$ finishes at 81.93 U.S. cents

* Bond prices lower across the curve (Adds details, quotes)

By Jennifer Kwan

TORONTO, April 28 (Reuters) - Canada's currency was slightly lower against the U.S. dollar on Tuesday in muted dealings as oil prices sank on concern about the depth of the swine flu outbreak, undercutting the effects of better-than-expected U.S. economic data.

North American equity market trimmed earlier losses on data that showed U.S. consumer confidence posted its biggest jump in more than three years in April, while the slump in U.S. home prices showed signs of slowing in February. [ID:nN28304426]

That helped calm earlier worries that major U.S. banks may need more capital.[MKTS/GLOB]

"In the current environment, anything that looks good for the U.S. economy or global economy is bad for the U.S. dollar," said David Watt, senior currency strategist at RBC Capital Markets.

The market continued to be fixated by the dangers of a possible flu pandemic as the swine flu virus that has killed 149 people in Mexico spread to more countries. [ID:nLS803449]

"There are so many things such as swine flu, and those sort of things that are roiling in the background. What we're literally getting is drivers based on conjecture and fear," Watt said.   Continued...