CANADA FX DEBT-C$ rises as greenback eases, equities up

Wed Jan 28, 2009 10:13am EST
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* C$ up 1.5 pct as US$ sags on move to riskier assets

* Bonds lower on higher TSX, looming supply concerns

By Jennifer Kwan

TORONTO, Jan 28 (Reuters) - The Canadian dollar rallied 1.5 percent against the U.S. currency on Wednesday, helped by firmness in commodities and weakness in the greenback as investors stepped into riskier assets.

Canadian bond prices were lower across the curve as money flowed into equities with the Toronto's main stock index .GSPTSE up more than 1 percent.

At 9:50 a.m. (1450 GMT), the Canadian dollar was at C$1.2083 to the U.S. dollar, or 82.76 U.S. cents, up from C$1.2263 to the U.S. dollar, or 81.55 U.S. cents, on Tuesday.

The unit touched a high of C$1.2025 to the U.S. dollar, or 83.16 U.S. cents.

"We're seeing a reversal of risk aversion trades so we're seeing a little more risk appetite," said Sal Guatieri, senior economist at BMO Capital Markets.

A rally in equities was prompted by optimism over a Bloomberg report that stated the Federal Deposit Insurance Corp is aiming to take control of a "bad bank" to be set up by the U.S. government to mop up toxic assets from struggling banks. For more details, see: [ID:nN27462853]   Continued...