3 Min Read
* C$ rallies to overnight high of C$1.0771
* Improved global economic outlook aides rally
* Bonds flat ahead of domestic GDP report for May
By Frank Pingue
TORONTO, July 31 (Reuters) - Canada's dollar rose against the U.S. currency on Friday and neared a 10-month high as a growing view that the global economy may be on the path to recovery helped boost the appeal of riskier assets.
Strong global corporate earnings have helped ignite a rally in many higher-yielding assets this month as risk appetite has picked up after drying out for much of June.
At 7:50 a.m. (1150 GMT), the Canadian unit was at C$1.0791 to the U.S. dollar, or 92.67 cents, up from C$1.0842 to the U.S. dollar, or 92.23 U.S. cents, at Thursday's close.
"The market is more willing to take on risk, and that's been driven by the fact that U.S. equity futures managed to rally overnight, and that tends to be the key barometer vis-a-vis risk that people are looking at," said George Davis, chief technical strategist at RBC Capital Markets in Toronto.
"So with futures higher, people are less risk averse, which in turn has weighed on the U.S. dollar and that has helped to benefit the Canadian dollar."
Overnight the Canadian dollar rallied to C$1.0771 to the U.S. dollar, or 92.84 U.S. cents, which was spitting distance from the near 10-month high it hit earlier this week.
Davis said if the Canadian dollar can manage to close above C$1.0784 to the U.S. dollar, or 92.73 U.S. cents, it would indicate a bearish sentiment towards the U.S. dollar and open the door for a move toward C$1.06, or 94.34 U.S. cents.
The Canadian dollar is up 7.8 percent in July after a skid of 6 percent in June.
Canadian bond prices were largely flat across the curve as dealers awaited an 8:30 a.m. (12:30 GMT) release of Canadian gross domestic product data for May.
The report is expected to show gross domestic product by industry fell 0.3 percent in May, which would mark the tenth-straight month the economy contracted. (Editing by Theodore d'Afflisio and Padraic Cassidy)