CANADA FX DEBT-C$ rises on oil, U.S. debt concerns

Thu May 28, 2009 5:10pm EDT
 
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* Canadian dollar gets boost from rising oil, weaker USD

* Bonds track U.S. Treasuries in long-dated recovery rally

By Cameron French

TORONTO, May 28 (Reuters) - The Canadian dollar firmed versus the U.S. currency on Thursday, helped by stronger domestic stock prices, a rise in the price of oil and debt-fueled pressure on the greenback.

The currency rose briefly above 90 U.S. cents, but eased below the mark later in the session, failing to eclipse a 7-month intraday high hit on Wednesday.

The Canadian dollar ended the session at C$1.1148 to the U.S. dollar, or 89.70 U.S. cents, up from C$1.1195 to the U.S. dollar, or 89.33 U.S. cents, at Wednesday's close.

Crude oil prices climbed 3 percent to top $65 barrel, enhancing the appeal of Canada's oil-rich economy, while a 2.5 percent rise in Canadian equities was seen drawing foreign stock buyers.

Also helping the currency was growing concern about the amount of debt the United States will have to issue to cover its record budget deficit.

"The flavor of the day seems to be the (U.S.) bond market right now," said Steven Butler, head of currency trading at Scotia Capital.   Continued...