3 Min Read
* C$ rallies to overnight high of C$1.0837
* Upbeat data, higher commodities, fuel gain
* Bond prices lower ahead of domestic data
By Frank Pingue
TORONTO, July 30 (Reuters) - Canada's dollar rose versus the U.S. currency on Thursday morning as higher commodity prices and upbeat economic data overseas helped to restore investors' appetite for riskier currencies.
The Canadian dollar rose as high as C$1.0837 to the U.S. dollar, or 92.28 U.S. cents, overnight on the heels of two consecutive North American sessions where it dropped from the near 10-month high hit earlier this week.
The latest rise was aided by data that showed euro zone economic sentiment improved in July, the fourth improvement from a trough in March, which helped signal that the economy there is bottoming out. [ID:nLT1519]
Talk of an economic recovery gave a boost to prices for many of the commodities that Canada exports, namely oil and gold.
"If the market is convinced that we are in the tail end of this recession and things are looking better for Q3 then risk should be back on and the Canadian dollar should continue to outperform," said Steve Butler, director of foreign exchange trading at Scotia Capital.
"For now anyway, until things change, the market is still in a very positive mode and we are going to have days like yesterday where it was corrective."
At 7:45 a.m. (1145 GMT), the Canadian unit was at C$1.0840 to the U.S. dollar, or 92.25 U.S. cents, up from C$1.0907 to the U.S. dollar, or 91.68 U.S. cents, at Wednesday's close.
Also helping to boost risk appetite overnight was comments from China's central bank, which pledged to keep loose monetary policy to support economic recovery. [ID:nPEK357846]
Canadian bond prices were stuck lower across the curve as the improved economic outlook damped investors demand for more secure assets like government debt. The early selloff ate away at most of the gains recorded on Wednesday.
The bonds could be influenced by Thursday's Canadian data. June producer prices data is expected to show a rise of 0.3 percent, while raw materials prices for June are expected to rise 3.0 percent. The data are due at 8:30 a.m.
(Editing by Chizu Nomiyama)