CANADA FX DEBT-C$ knocked down, hit by equity slide

Fri Oct 31, 2008 10:04am EDT
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* Canadian dollar rattled by global equity market slide

* Lower commodity prices weigh on currency

* Weak Canadian GDP data sparks rally in bond prices

By Frank Pingue

TORONTO, Oct 31 (Reuters) - The Canadian dollar, along with most major currencies, dropped versus the U.S. dollar on Friday, hurt as equity markets fell due to renewed fears of global recession.

Bond prices rose as investors sought secure government debt in the face of a stock selloff and data from Canada that showed the economy shrank in August.

At 9:45 a.m. (1445 GMT), the Canadian unit was at C$1.2298 to the U.S. dollar, or 81.31 U.S. cents, down from C$1.2180 to the U.S. dollar, or 82.10 U.S. cents, at Thursday's close.

The drop in the Canadian dollar followed three straight winning sessions that had lifted it to its highest level in 10 days.

The Canadian dollar has taken its cue from equity markets in recent sessions, rising when investors decided to take on riskier assets and falling as recession concerns convinced investors to liquidate assets and buy U.S. dollars.   Continued...