CANADA FX DEBT-C$ up as improved sentiment helps reverse slide

Tue Oct 28, 2008 9:54am EDT
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* Higher oil and stock prices help boost Canadian dollar

* Currency fell to 4-year low below 70 US cents overnight

* Bond prices slide as investors flock back to equities

By Frank Pingue

TORONTO, Oct 28 (Reuters) - The Canadian dollar was higher versus the U.S. dollar on Tuesday in choppy trade that saw the currency move back from its lowest level in more than four years as a bout of short-covering kicked in.

Bond prices, with no Canadian data to consider, were down across the curve alongside the bigger U.S. Treasury market as a slew of bargain-hunting gave a jolt to global stock markets and left little interest in government debt.

At 9:40 a.m. (1440 GMT), the Canadian unit was at C$1.2864 to the U.S. dollar, or 77.74 U.S. cents, up from C$1.2889 to the U.S. dollar, or 77.58 U.S. cents, at Monday's close.

That erased a steep overnight fall in the currency, which dropped to C$1.3019 to the U.S. dollar, or 76.81 U.S. cents, its lowest level since September 2004.

"People were lined up one way, the markets went against them and they basically had to jump on it," said David Watt, senior currency strategist at RBC Capital Markets.   Continued...