CANADA FX DEBT-C$ hits highest level in nearly 10 months

Tue Jul 28, 2009 8:03am EDT
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 * C$ rises to C$1.0750 to the U.S. dollar
 * Firmer commodity prices support rally
 * Bond prices stuck lower across curve
 By Frank Pingue
 TORONTO, July 28 (Reuters) - Canada's dollar was a touch
higher versus the U.S. dollar on Tuesday as firmer prices for
oil and gold, coupled with optimism over a global recovery,
helped to extend a recent desire for riskier assets.
 During the overnight session the Canadian currency rallied
as high as C$1.0750 to the U.S. dollar, or 93.02 U.S. cents,
which marked its highest level since Oct. 3.
 The latest rise in the Canadian dollar, now up 21 percent
since falling to a four-year low in March, came as the price of
oil extended its most sustained rally since last year while
gold prices also firmed.
 "It's just another creep toward more appetite for risk and
the Canadian dollar, as usual, is perceived as a relatively
riskier currency and tends to do well when that's the case,"
said Adam Cole, global head of FX strategy at RBC Capital
Markets in London.
 "So just a general growing confidence that the worst is
behind us, not that there is any particular news flow to hang
it on, and better commodity prices are also helping."
 Cole also said the Canadian currency continued to benefit
from the Bank of Canada statement last week when the central
bank softened the hard tone it had taken toward a surge in the
currency last month. [ID:nN21196742]
 At 7:50 a.m. (1150 GMT), the Canadian unit was at C$1.0809
to the U.S. dollar, or 92.52 U.S. cents, up from C$1.0811 to
the U.S. dollar, or 92.50 U.S. cents, at Monday's close.
 Canadian bond prices, with no domestic data to consider
until later in the week, followed the bigger U.S. Treasury
market lower across the curve ahead of a U.S. sale of $42
billion of two-year paper later in the session.
 Data due for release in Canada on Thursday is expected to
show a rise of 0.3 percent in producer prices for June, while
raw materials prices for June are expected to rise 3.0 percent.
 (Editing by Theodore d'Afflisio)