Canadian dollar lifted by commodities

Mon Mar 24, 2008 5:27pm EDT
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By John McCrank

TORONTO (Reuters) - The Canadian dollar rose on the back of a modest bounce in commodity prices and an economic report out of the United States that suggested a bottom to the U.S. housing crisis may be in sight.

Domestic bond prices fell as equity prices rallied, lessening the safe-haven appeal of government debt.

The Canadian dollar closed at C$1.0179 to the U.S. dollar, or 98.24 U.S. cents, up from C$1.0234 to the U.S. dollar, or 97.71 U.S. cents, at Thursday's close.

The currency had fallen as low as C$1.0309 to the U.S. dollar, or 97.00 U.S. cents, overnight, its lowest level since January 23.

Its rebound followed a 3.6 percent drop against the greenback last week as commodity prices tumbled from recent peaks.

The action in the markets last week was exaggerated by thin trading due to Friday's Easter holiday. And, with much of Europe closed for Easter Monday, trading was once again whippy.

Gains in commodity prices early in the session helped boost demand for Canadian dollars.

"The Canadian dollar bulls took heart from a pause in the commodity correction," said Matthew Strauss, senior currency strategist at RBC Capital Markets.   Continued...