April 2, 2009 / 5:00 PM / 11 years ago

CANADA FX DEBT-C$ shoots higher on G20 developments

 * C$ gets brief boost above 81 U.S. cents
 * G20 deal to fight economic crisis helps spur gains
 * Mark-to-market changes in U.S. also a factor
 By Frank Pingue
 TORONTO, April 2 (Reuters) - The Canadian dollar rose to
its highest level against the U.S. dollar in nearly a week on
Thursday as optimism from the G20 summit in London increased
investor appetite for risker assets.
 The currency's surge was aided by a jump in North American
equities and a skid in the greenback as leaders from the Group
of 20 economic powers pledged to boost world output.
 "There is a lot of optimism in the market right now in
terms of some of the announcements coming out of the G20
meeting," said George Davis, chief technical strategist at RBC
Capital Markets.
 "Markets are very hopeful that global measures taken are
going to help revive the global economic system so that's been
taken in a positive stride."
 At 12:45 p.m. (1645 GMT), the Canadian dollar was at
C$1.2354 to the U.S. dollar, or 80.95 U.S. cents, up from
C$1.2610 to the U.S. dollar, or 79.30 U.S. cents at Wednesday's
 Earlier, it had rallied as high as C$1.2339 to the U.S.
dollar, or 81.04 U.S. cents.
 Davis said part of the currency's gain versus its U.S.
counterpart was stop loss driven as the greenback's fall below
C$1.2433 caught investors off guard.
 Another boost came from the relaxation of mark-to-market
accounting rules in the United States which Davis said helped
underpin sentiment as it should help the balance sheets of
financial companies. [ID:nWEN6801]
 "Whenever equity markets rally and risk aversion moves
lower that has generally been an environment that has been
bearish for the U.S. dollar," said Davis. "So we've seen the
U.S. dollar under pressure across the board."

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