July 15, 2009 / 12:11 PM / 11 years ago

CANADA FX DEBT-C$ hits highest level in more than 3 weeks

 * C$ rallies to C$1.1265 to the U.S. dollar
 * Data and commodity prices help fuel gains
 * Bond prices lower as stocks set to rally
 By Frank Pingue
 TORONTO, July 15 (Reuters) - Canada’s currency rallied to its highest level in over three weeks versus the U.S. dollar on Wednesday as a rise in oil and commodity prices combined with recent upbeat domestic data to boost risk appetite.
 That combination raised the Canadian dollar to C$1.1265 to the U.S. dollar, or 88.77 U.S. cents, marking its highest level since June 19 and lifting it further from the seven-week low it tumbled to last week.
 “We generally think the Canadian dollar has turned around so it’s looking very much as if the June correction higher in (the U.S. dollar versus the Canada dollar) has run its course,” said Shaun Osborne, chief currency strategist at TD Securities.
 “The generally favorable data that we’ve had out in Canada, particularly over the last few days, seems to be supporting sentiment for the currency again.”
 Earlier this week a pair of surveys from the Bank of Canada showed businesses are more hopeful about their economic future while lenders are tightening credit conditions at a lesser rate than in previous quarters. The reports reinforce other data suggesting the recession may have hit bottom. [ID:nN13381629]
 Other factors supporting the domestic currency were a rise in prices for key Canadian exports like oil and gold. Improved expectations for an economic recovery boosted oil prices, while a weaker U.S. dollar lent a bid to gold.
 At 7:45 a.m. (1145 GMT), the Canadian unit was at C$1.1275 to the U.S. dollar, or 88.69 U.S. cents, up from C$1.1360 to the U.S. dollar, or 88.03 U.S. cents, at Tuesday’s close.
 Part of the Canadian dollar’s strength also was attributed to a weaker U.S. dollar, which fell as a more upbeat tone to equity markets remained after strong earnings from both Goldman Sachs (GS.N) and Intel (INTC.O) on Tuesday.
 However,  the upbeat tone in equity markets did little to help domestic bond prices. They were lower across the curve ahead of an expected higher open for North American equities.  (Editing by Theodore d’Afflisio)                                                  

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