CANADA FX DEBT-C$ hits 3-week high ahead of domestic GDP data

Thu Mar 31, 2011 8:21am EDT
 
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   * C$ firms to C$0.9691, or $1.0319, near three-week high
 * Bonds firm across the curve
 TORONTO, March 31 (Reuters) - The Canadian dollar rose to
near three-week highs against the U.S. currency on Thursday, as
oil continued to provide support ahead of key domestic economic
data.
 Traders are expected to digest Canada's gross domestic
product numbers for January, which come out at 8:30 a.m. (1330
GMT). ECONCA
 Expectations are that GDP rose 0.5 percent in January -- a
solid start to the year and potentially enough for an upgraded
economic outlook by the Bank of Canada in its Monetary Policy
Report in April, but likely not enough to spur the central bank
to raise interest rates next month. CAGDPM=ECI
 At 7:54 a.m. or (1254 GMT), the Canadian dollar was at
C$0.9691 to the U.S. dollar, or $1.0319.
 "CAD is benefiting from strength in the price of oil this
morning," Jack Spitz, managing director of foreign Exchange at
National Bank of Canada said in a note to clients.
 "(GDP data is) likely to underscore the continued strength
of the Canadian economy. Strong GDP numbers may further add to
the case for renewed hawkishness from the Bank of Canada."
 The currency hit a three-week high of C$0.9683, or $1.0327
very early morning. This was its highest level since March 9,
when it reached C$0.9667, or $1.0344 and was its strongest
level since November 2007. [ID:nN09287031]
 Crude oil prices firmed, with Brent crude heading into its
biggest quarterly gain in nearly two years as Middle East
supply worries continued to weigh. $100-plus oil has been a
boon for the commodity-linked Canadian dollar with oil a major
export for the country. [O/R]
 Canadian bond prices were mostly higher across the curve,
mirroring U.S. Treasury movements. Investors were cautious
ahead of the influential U.S. non-farm paryoll data for March,
to be released on Friday. [US/]
 The two-year bond CA2YT=RR was up 1 Canadian cent to
yield 1.770 percent, while the 10-year bond CA10YT=RR added
03 Canadian cents to yield 3.284 percent.
 (Reporting by Solarina Ho; editing by Jeffrey Hodgson)