Economic hopes boost C$ for third straight day

Fri Jul 24, 2009 11:54pm EDT
 
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By Jennifer Kwan

TORONTO (Reuters) - The Canadian dollar rose against the greenback for a third straight session on Friday, encouraged by stable equity and commodity markets and reassured by the mostly rosy economic outlook issued by the Bank of Canada on Thursday.

The Canadian dollar rose as high as C$1.0794 to the U.S. dollar, or 92.64 U.S. cents.

The Bank of Canada declared Canada's recession to be virtually over and offered a mostly upbeat view on the world economy. As well, the central bank toned down its stance against the Canadian currency's appreciation.

"It's not off their radar screens but they have watered down the concern about the Canadian dollar strength," said Matthew Strauss, senior currency strategist at RBC Capital Markets.

"I think the market feels more comfortable that the Bank of Canada at this point will not stand in front of the rally in the Canadian dollar," he said.

But Bank of Canada Governor Mark Carney warned on Thursday that the bank would not be afraid to use unorthodox tools if it felt the Canadian dollar was climbing too sharply.

Two cabinet ministers, Finance Minister Jim Flaherty and Trade Minister Stockwell Day, chimed in on Friday to voice their concern about the appreciating currency.

Day said that a rising Canadian dollar was hurting the country's exports, but that the currency has not reached a level to cause serious worries.   Continued...