CANADA FX DEBT-C$ bounces back to finish week higher

Fri Oct 31, 2008 4:41pm EDT
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* Records first winning week in five weeks

* Ends October 11.6 percent lower

* Bonds relinquish early gains, end lower

By Frank Pingue

TORONTO, Oct 31 (Reuters) - The Canadian dollar rebounded to close higher against the U.S. dollar on Friday and secure its first weekly gain in five weeks as traders backed out of long U.S. dollar positions.

Domestic bond prices fell across the curve in a volatile session where prices bounces around the break-even level as equity markets moved in and out of negative territory.

The Canadian dollar closed at C$1.2045 to the U.S. dollar, or 83.02 U.S. cents, up from C$1.2180 to the U.S. dollar, or 82.10 U.S. cents, at Thursday's close.

For the week, the currency rose 5.7 percent, but still ended the month down 11.6 percent as equity markets sold off sharply and prompted a surge in demand for the greenback.

October was a roller-coaster month for the Canadian dollar as it skidded below 77 U.S. cents at one point, its lowest level since September 2004, before bouncing back to hit 84 U.S. cents.   Continued...