CANADA FX DEBT-C$ reaches highest since Jan. 9, helped by stocks

Thu Apr 30, 2009 4:58pm EDT
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* C$ finishes at 83.82 U.S. cents

* Improved equity market sentiment helps drives gain

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

TORONTO, April 30 (Reuters) - The Canadian dollar touched its highest level in nearly four months on Thursday as market sentiment improved on optimism the global economy may be starting to stabilize.

The appetite for risk, along with firmer oil prices, helped the domestic currency break through a key technical level, while equity markets managed to remain relatively stable throughout the day, supporting the currency on the upside.

Canada's currency rallied overnight to as high as C$1.1864 to the U.S. dollar, or 84.29 U.S. cents, its highest level since Jan. 9.

"It's still the equity market theme that is helping the currency here," said George Davis, chief technical strategist at RBC Capital Markets. "It has to do more with general sentiment and general psychology.

"Even though the markets weren't able to hold on to their gains throughout the day we certainly haven't seen any type of significant or sharp selloff."

The broader theme of improved risk appetite kept the currency higher even as data on Thursday showed the seventh straight monthly fall in GDP.   Continued...