February 9, 2009 / 3:06 PM / 11 years ago

CANADA FX DEBT-C$ rises as U.S. stimulus expected

 By Frank Pingue
 TORONTO, Feb 9 (Reuters) - The Canadian dollar was higher
versus the greenback on Monday after a choppy morning as
traders worried over the timing and details of U.S. plans for
fiscal stimulus and a package to help banks.
 U.S. President Barack Obama's administration delayed the
announcement of the bank rescue plan, which had been scheduled
for Monday, until Tuesday as the government pressed lawmakers
to settle their differences over the economic stimulus plan.
 The announcement of the rescue plan, which aims to shore up
some of the biggest U.S. banking institutions, was pushed back
to enable lawmakers to spend the day focusing on the stimulus
package ahead of a vote on Tuesday.
 That helped offer an early boost to the U.S. dollar, which
is considered a safe haven play.
 But the move was undone and the Canadian currency turned
higher as traders accepted that a bailout, while delayed, would
still get done. That kept some interest in snapping up riskier
assets such as the Canadian dollar.
 "Obviously the delay getting the package pushed through in
the U.S. has been unsettling, but at the same time people have
a lot of hope that it will eventually get done and we'll see
some things actually start to go to work," said Steve Butler,
director of foreign exchange trading at Scotia Capital.
 At 9:45 a.m. (1445 GMT), the Canadian unit was at C$1.2198
to the U.S. dollar, or 81.98 U.S. cents, up from C$1.2225 to
the U.S. dollar, or 81.70 U.S. cents, at Friday's close.
 Canadian bond prices were stuck slightly lower across the
curve alongside the bigger U.S. Treasury market as focus on the
stimulus and a bank rescue plan in the United States brought
supply concerns back into the picture.
 (Editing by Peter Galloway)

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