November 3, 2009 / 5:30 PM / 11 years ago

CANADA FX DEBT-C$ rebounds as gold prices hit record high

 * Climbs to C$1.0712 to the U.S. dollar at midday
 * More than 1 U.S. cent off overnight low
 * Bond prices higher across curve
 (Recasts, updates to midday)
 By Frank Pingue
 TORONTO, Nov 3 (Reuters) - Canada's dollar clawed back from
early weakness to rise against the U.S. currency on Tuesday,
thanks partly to record-high prices for gold, but its move was
capped by a slide in the price of oil.
 The currency's rebound sent it as high as C$1.0681 to the
U.S. dollar, or 93.62 U.S. cents, which was comfortably off the
overnight low of C$1.0855 to the U.S. dollar, or 92.12 U.S.
 Helping to power the turnaround was a rise in gold prices
to a record high above $1,080 an ounce as the International
Monetary Fund's sale of gold to India's central bank boosted
sentiment toward the metal. [GOL/]
 But the price of oil, Canada's biggest export commodity,
fell to below $77 a barrel and held the currency's rally in
check. [O/R]
 By 12:15 p.m. (1715 GMT), the currency was at C$1.0712 to
the U.S. dollar, or 93.35 U.S. cents, up from C$1.0778 to the
U.S. dollar, or 92.78 U.S. cents, at Monday's close.
 "It's hard to find a particular facet, but you are hearing
that people are eager to sell dollar/Canada when it gets near
key technical levels," said David Watt, senior currency
strategist at RBC Capital Markets.
 "People are just not wanting to go long U.S. dollars, so
they are using U.S. dollar rallies as an opportunity to sell."
 Earlier, the Canadian dollar was among several in a basket
of currencies to be hit by risk aversion arising from concerns
about the European banking sector.
 Canadian bond prices were higher across the curve as
dealers jockeyed for positions ahead of Wednesday's statement
from the U.S. Federal Reserve on monetary policy.
 (Editing by Rob Wilson)

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