CANADA FX DEBT-C$ surges to three-month high overnight

Thu Apr 30, 2009 7:44am EDT
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 * C$ rallies as high as 84.29 U.S. cents
 * Improved market sentiment drives gain
 * Bond prices stuck lower across the curve
 By Frank Pingue
 TORONTO, April 30 (Reuters) - The Canadian dollar charged
to its highest level in over three months on Thursday as an
improved market sentiment helped the domestic currency break
through a key technical level.
 Canada's currency rallied overnight as high as C$1.1864 to
the U.S. dollar, or 84.29 U.S. cents, its highest level since
Jan. 9, outperforming the other commodity-based currencies like
the Australian and New Zealand dollars.
 By 7:30 a.m. (1130 GMT), the currency retreated slightly to
C$1.1907 to the U.S. dollar, or 83.98 U.S. cents, up
comfortably from C$1.2030 to the U.S. dollar, or 83.13 U.S.
cents, at Wednesday's close.
 The domestic currency had followed other commodity-based
currencies higher on Wednesday but it was unable to strengthen
past C$1.1990, 83.40 U.S. cents, despite several attempts.
 "A continuation of risk appetite overnight gave the market
enough reason to push through that (level) and once it broke
through C$1.1990 it played catch up with Aussie dollar and as a
result it outperformed overnight," said Matthew Strauss, senior
currency strategist RBC Capital Markets.
 "It just seems the market is looking and reacting to
positive data and at the moment events or data that contradict
that are simply ignored or only have a minimal impact."
 Sentiment was upbeat overnight as global equities rallied
as investors bet on a stabilization of the world economy and
took heart from some upbeat corporate earnings.
 Domestic bond prices were lower across the curve alongside
the bigger U.S. Treasury market, adding to the skid during the
previous session when the U.S. Federal Reserve said the pace of
economic deterioration in the United States appeared to be
slowing. [ID:nN29410693]
 (Editing by Theodore d'Afflisio)