June 9, 2010 / 1:18 PM / 10 years ago

CANADA FX DEBT-C$ at 5-day high on China export numbers

 * C$ rises to 96.08 U.S. cents
 * Reports say China exports up 50 percent
 * Canadian bonds prices dip as safely bid unwinds
 By John McCrank
 TORONTO, June 9 (Reuters) - Canada's dollar rose to its
highest level in five days against the U.S. dollar on
Wednesday, fueled by news of stronger-than-expected Chinese
exports in May, indicating strength in the global economy.
 Canada is a major exporter of oil and other commodities, so
when prospects for global growth improve, the Canadian dollar
often strengthens.
 At 8:40 a.m. (1240 GMT), the currency was at C$1.0408 to
the U.S. dollar, or 96.08 U.S. cents, up from Tuesday's North
American finish of C$1.0485 to the U.S. dollar, or 95.37 U.S.
 "It's been pulled up a little bit along with the other
commodity currencies by stories that we've seen overnight about
Chinese exports," said Adam Cole, head currency strategist at
RBC Capital Markets in London.
 Chinese exports in May grew about 50 percent from a year
earlier, a senior government official told an internal investor
conference on Wednesday, sources present at the meeting told
Reuters. The data is due out on Thursday. [ID:nBJD003776]
 "The expectation was for 30 percent and that generally is
giving a bid to riskier assets and riskier currencies and
cyclical currencies, etcetera, etcetera -- a kind of a knock-on
effect through growth expectations globally," said Cole.
 Investors, however, remained on edge over the sovereign
debt problem in Europe and if there is another bout of weakness
in the equity markets, Canada's currency would likely weaken
off, Cole said.
 The economic worries in Europe have hit the euro hard, and
the Canadian dollar on Wednesday hit C$1.2511, or 79.93 euro
cents, its strongest level since October 2000 against the
single currency.
 There is no major Canadian data due on Wednesday.
 In the United States, market participants will monitor
comments from U.S. Federal Reserve Chairman Ben Bernanke, who
is scheduled to testify before the House Committee on the
budget at 1400 GMT.
 Bank of Canada Governor Mark Carney gives a speech in
Montreal on Thursday morning on "The G20's Core Agenda to
Reduce Systemic Risk," followed by a press conference.
 Canadian bond prices edged lower across the curve,
mirroring U.S. Treasuries, as investors cautiously unwound
safety bids with U.S. stock futures pointing to a positive
open. [US/]
 The two-year Canadian government bond CA2YT=RR was down 9
Canadian cents to yield 1.715 percent, while the 10-year bond
CA10YT=RR fell 17 Canadian cents to yield 3.343 percent.
 (Reporting by John McCrank; Editing by Theodore d'Afflisio)

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